Insurers sue Mass. regulators over rejected rate hikes

The Boston Globe: Massachusetts insurers are suing the state government after regulators rejected proposed double-digit premium rate increases that would have gone into effect April 1. The move would spell hundreds of millions of dollars in losses for the six insurers that joined the suit, the firms said. "Today's suit sets the stage for a showdown between state regulators and the health insurance industry. Governor Deval Patrick has made reining in runaway health care costs a centerpiece of his administration -- and his campaign for reelection -- contending they are stifling the capacity of small businesses to create jobs. At the same time, health insurers argue that government is forcing them to sell policies at a loss that is unsustainable as the cost of medical services climbs" (Weisman, 4/5).

The Associated Press: Gov. Patrick "has argued such increases are stifling job growth, as small businesses choose between hiring new employees and paying larger health premiums for existing ones. ... Insurers say capping their premiums without controlling costs addresses the effect without dealing with its cause," the cost of medical services. Patrick's administration is also seeking legislation that would control charges from hospitals, doctors and other providers (Johnson, 4/5).

Boston Herald: The six insurers contend that the state's insurance commissioner, Joseph Murphy, violated the law by telling insurers to retain the same rates as last year, in essence setting caps. The state can reject rate increases, but never has in the past. A lawyer for insurers argues their power stops there, however: Murphy "had no authority to establish rates," the lawyer said. Murphy rejected 235 of 274 proposed rate increases for this year (McConville, 4/6).