| Issue: # 48 |
April 6, 2010 |
Last week the Massachusetts Division of Insurance disapproved / rejected the request of the major health insurance carriers to increase rates for April, May and June. Check out the Boston Globe story, This was the first time this has ever happened.The Division of Insurance has always had the power to do this and now, all of a sudden, they have decided to step in and challenge these rates.
Health Plan |
No. of
Proposed Increases |
No.
Rejected |
Range of
Proposed Increases |
| Aetna |
2 |
0 |
|
| Blue Cross Blue Shield |
19 |
19 |
10.36%-16.60% |
| Blue Cross Blue Shield HMO Blue |
64 |
63 |
9.30%-22.60% |
| Connecticare |
24 |
0 |
|
| Fallon Community Health Plan |
47 |
47 |
21.70%-35.20% |
| Harvard Pilgrim Health Care |
26 |
25 |
8.30%-12.60% |
| Health New England |
30 |
30 |
13.40%-19.80% |
| Neighborhood Health Plan |
19 |
15 |
11.00% |
| Tufts Health Plan |
36 |
36 |
11.10%-24.70% |
| United HealthCare |
7 |
0 |
|
| Total |
274 |
235 |
|
Today these 6 carriers, who had their requests rejected, have filed suit against the Division of Insurance. Boston Herald story, click here. There is a good chance that the insurance companies request will be honored. We understand the burden these increases have placed on our clients, but the Commonwealth of Massachusetts setting or capping premium rates does not address the real problem of increasing medical costs, over-utilization, and the rates charged by hospitals and providers.
We will keep you abreast of any new developments. As always, if you have any questions email Bill or Vanessa. We hope you find these newsletters helpful, please forward to anyone who may find this of interest. To learn more about Advantage Benefits click here.
The Masters start this Thursday. Spring is here!
Sincerely,
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Healthcare Reform
We need to control costs to provide relief
|
There was an excellent story in the Boston Globe this past Sunday. Finally the state is addressing key issues that have been problematic for the insurance carriers causing many of the large increases. Check out the interview with Larry Croes of Blue Cross Blue Shield. He has provided the State with actual valuable statistics/data of how certain loopholes are causing significant losses for the carriers.
We must end this never-ending "open enrollment" loop hole. The Massachusetts Health Care Reform Law of 2006, merged the small group(1-50) marketplace and the individual marketplace into one insurance pool. This merger has resulted in individuals that purchase insurance when they need it, receive medical treatment, and then cancel coverage when treatment is no longer needed. These individuals would rather pay the penalty for not having insurance, as it is immaterial (approximately $1,000 per year) compared to the actual cost of the insurance. At the same time the never-ending "open enrollment" enables them to repurchase health insurance when they need it and drive up the costs for everyone else in the 1-50 marketplace.
Unlike all group sponsored health plans, which have a limited annual open-enrollment period, the 2006 law in essence allows for health insurance on-demand. In theory, it sounds good when an insurance company can not deny coverage based on pre-existing conditions, in practice; it's a huge cost driver because people are "gaming" the system as was reported in the Boston Globe .
Like Medicare or any private or public employer, we must limit the "open enrollment" period for health insurance to individuals & small groups to one month each year. Imagine the effect on premiums, if we forced insurance companies to insure houses that were already on fire, or cars after they were in accidents. This is no different. |
| No rates available
Everything shut down
|
Right now all the carriers have closed down their on-line quoting systems to get rates until all of this is settled with the Division of Insurance. This means that we can not get any new quotes, and even renewals are on hold. Any renewal rates that have been released are not guaranteed right now, and the carriers will be sending letters to clients to make them aware of the situation.
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