The nation's health insurers are waiting with baited breath to find out exactly what will count as a medical cost in the medical-loss ratios that will soon be mandated by the Patient Protection and Affordable Care Act, reports the Wall Street Journal. But for now, they have the soap-opera world of Massachusetts health insurance premiums to distract them.
In the latest move, Massachusetts state regulators have decided to maintain a cap on prices, freezing rates at 2009 levels, for 137 health plans, reports the Boston Globe. However, the state approved rate increase requests for Blue Cross Blue Shield of Massachusetts, Neighborhood Health Plan, Aetna and ConnectiCare. Insurance Commissioner Joseph Murphy also asked three insurers--Harvard Pilgrim Health Care in Wellesley, Blue Cross Blue Shield HMO Blue in Boston, and Fallon Community Health Plan in Worcester--to submit more data to support their requested rate hikes. Harvard Pilgrim responded by agreeing to a voluntary limit on its premium increases for individuals and small businesses. Industry watchers deemed the settlement a surprise because a state insurance appeals panel recently overturned a Division of Insurance-imposed cap on Harvard Pilgrim's rates.
Wellesley-based Harvard Pilgrim will increase premiums by 7 to 11 percent for small businesses and individual policyholders instead of the 8 to 12 percent it had initially sought. Technically, the agreement covers April 1, 2010, to March 31, 2011, but the insurer won't seek any retroactive increases. That means the effective increase is roughly 7.7 percent for the year. Harvard Pilgrim said the settlement was necessary, despite a projected loss in premium revenues of $5 to $10 million, in order to put the matter to rest and get back to business.
Despite the state touting the agreement as a win for consumers, the costs savings are "not very significant,'' said Lora Pellegrini, president of the Massachusetts Association of Health Plans. "The governor has wasted a lot of time on this without bringing significant and meaningful relief to small businesses."
Under the settlement, Harvard Pilgrim also is ending its participation in a multi-insurer lawsuit filed against the state in April that is seeking to overturn the rate caps. William C. Van Faasen, interim president and CEO of Blue Cross Blue Shield of Massachusetts, expects to win that fight, saying the state "will lose in court," reports The Republican.