MA Governor orders non-profit insurers to sell policies at a loss

[Revere]

Wake up, drones, it's not the profit. Nobody needs to spin this...

http://online.wsj.com/article/SB10001424052702304198004575171782805022028.html?m od=rss_Today's_Most_Popular


This week it became impossible in Massachusetts for small businesses and individuals to buy health-care coverage after Governor Deval Patrick imposed price controls on premiums. Read on, because under ObamaCare this kind of political showdown will soon be coming to an insurance market near you.

The Massachusetts small-group market that serves about 800,000 residents shut down after Mr. Patrick kicked off his re-election campaign by presumptively rejecting about 90% of the premium increases the state's insurers had asked regulators to approve. Health costs have run off the rails since former GOP Governor Mitt Romney and Beacon Hill passed universal coverage in 2006, and Mr. Patrick now claims price controls are the sensible response to this ostensibly industry greed.

Yet all of the major Massachusetts insurers are nonprofits. Three of largest four—Blue Cross Blue Shield, Tufts Health Plan and Fallon Community Health—posted operating losses in 2009. In an emergency suit heard in Boston superior court yesterday, they argued that the arbitrary rate cap will result in another $100 million in collective losses this year and make it impossible to pay the anticipated cost of claims. It may even threaten the near-term solvency of some companies. So until the matter is resolved, the insurers have simply stopped selling new policies.

A court decision is expected by Monday, but state officials have demanded that the insurers—under the threat of fines and other regulatory punishments—resume offering quotes by today and to revert to year-old base premiums. Let that one sink in: Mr. Patrick has made the health insurance business so painful the government actually has to order private companies to sell their products (albeit at sub-market costs).

[Smurf-Herder]

It's a microcosm of what we'll eventually see happening in the national plan.

America is in a slow death spiral. We just haven't hit the ground yet.

[Pat]

That adds a whole new meaning to the term "Non-Profit".

[Citizen]

This is very Hugo Chavez-like.

[Hawkeye2j]

The complaint is based on a profound misunderstanding of what the commissioner has done,’’ said Guberman, who contended insurers had no right to presume their rate proposals would automatically be approved. They should have been prepared to continue pricing policies using existing base rates until the state acted on the requested increases, he said, adding: “Whatever is the most recent rate is what’s legally in effect today.’’

The rejected rates were to have taken effect April 1. Proposed base rate increases averaged 8 to 32 percent for individuals and businesses with 50 or fewer employees in the small-group market. The category includes more than 800,000 residents served by hundreds of insurance plans. About 50,000 policies covering 200,000 members — roughly a quarter of the small-group market — were up for renewal April 1.

In the past, health insurers usually notified regulators of rate increases on the day they took effect. But in February, Governor Deval Patrick put in place emergency regulations requiring insurers to submit proposed rates 30 days in advance. Patrick said the state wanted to link the increases to the medical consumer price index — a spending measure rising at an estimated annual rate of 4.8 percent — to cushion the impact on small businesses and families struggling in the weak economy.

http://www.boston.com/business/healthcare/articles/2010/04/09/insurers_plead_rate_case_judge_to_rule_by_monday/