Mass. rejects insurers' rate hikes

Massachusetts regulators denied 235 of 274 requests by health insurance plans to raise premiums because officials view the hikes as excessive, The Boston Globe reports. "The rulings, following a review process set in motion by emergency regulations [Gov. Deval] Patrick filed in February, mark the first time the state has used its authority to turn down health premium increases." Last year's premiums will remain in effect, rather than the 8- to 32-percent base rate increases - plus extra increases for things like geographic adjustment - that many insurers proposed. Insurers said they would appeal the measure; small business applauded it (Weisman, 4/2).

The Globe, in a separate story: "Patrick's decision to take on the health insurance industry over rate increases promises to become a major issue in this year's gubernatorial race, with Patrick trying to address criticism that the state has not slowed health costs and his rivals saying the governor's approach is off-target and politically motivated." The governor's major opponents, "Republican Charles D. Baker and state Treasurer Timothy P. Cahill, an independent, say the move will hurt insurers and ultimately prove ineffective" (Bierman, 4/2).

The New York Times: "Mr. Patrick's move, which Mr. Baker dismissed as 'an election-year gimmick,' reflects the political advantage that many candidates perceive in attacking health insurance rates this year. Some analysts considered it a turning point in the health care debate in Washington when the Obama administration highlighted double-digit increases announced by Anthem Blue Cross of California" (Sack, 4/1).

The Associated Press: "Insurers say caps on their charges are justified only if there are similar caps on the costs that health care providers — such as doctors and hospital networks — charge them. That is the subject of pending legislation." The state's insurance commissioner, Joseph Murphy, said he rejected these increases because they were "excessive increases and rates unreasonable relative to the benefits provided" (Johnson, 4/1).

WBUR: Patrick said, "This is about giving some help and some economic breathing room to small businesses right now. I talk to small businesses all over the commonwealth who tell me stories about how they have the economic activity, they have reasons to justify adding staff — but with these 24 and 30 increase in premiums, they can't see their way to do that" (Pfeiffer, 4/1).

Meanwhile, "A court case in Maine underscores the tensions, with a health insurer battling a decision that zeroed out its profit to keep consumers' rates down," The Wall Street Journal reports. "A state court will soon rule on a decision by a Maine regulator who last year turned down the insurer's request for a premium increase sufficient to let it earn a profit, citing tough economic times. The regulator approved a smaller increase that was expected to leave the insurer losing money on individual policies." The battle is between "Anthem Blue Cross and Blue Shield, a unit of WellPoint Inc., and state insurance superintendent Mila Kofman, a 39-year-old regulator who came to Maine two years ago" (Mathews and Johnson, 4/2).