MA health insurers sue to raise rates

Say state’s veto will cause huge losses; Showdown near on regulatory power

Robert Weisman
The Boston Globe
4/6/2010

A half-dozen health insurers yesterday filed a lawsuit against the state seeking to reverse last week’s decision by the insurance commissioner to block double-digit premium increases — a ruling they say could leave them with hundreds of millions in losses this year.

The proposed rate hikes would have taken effect April 1 for plans covering thousands of small businesses and individuals. Insurers wanted to raise base rates an average of 8 percent to 32 percent; tacked on to that are often additional costs calculated according to factors such as the size and age of the workforce.

Yesterday’s legal action 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 costs of medical services climb…

…The rulings mean that health insurance rates established in 2009 for small businesses and individuals will remain in effect — rates the insurers say were not even sufficient to cover last year’s costs…

The entire article is at The Boston Globe

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