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Issue: # 56July 7, 2010 

Harvard-Pilgrim reaches an agreement
 

Dear

Last week we reported that Harvard-Pilgrim won their appeal with the Division of Insurance regarding 2nd quarter rates.   Here again is the story from the Boston Business Journal.   Although they won, there could have been another appeal filed by the Commonwealth of Massachusetts.   This did not happen, instead an agreement has been reached.   Here are some highlights as reported in this article from the Boston Herald:
  1. Harvard-Pilgrim took 1% off  previously filed rates.
  2. Groups that renewed or started coverage as of April 1st, who have been billed 2009 rates, will NOT receive retro-active bills.
  3. New approved rates will be reflected in the August bills.
This is the 2nd company company to settle.  The other being Neighborhood Health Plan, sent out approved rates in their June bills without any retro-active bills.  

Blue Cross, Tufts & Fallon are still awaiting their decisions from the appeals panel.  Lets hope they settle quickly and also do not bill retro-actively like Harvard and Neighborhood.  We will keep you posted and communicate any progress to you immediately!

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, by using the forward link at the bottom of this e-mail.    More importantly if you need any quotes on any existing group benefits plans, send us an e-mail.

To learn more about
Advantage Benefits, based in Worcester, Ma, click here. 


Sincerely,


Bill Randell CLU,CHFC,        Vanessa Costa CLU,CHFC,
Advantage Benefits Group,
3rd Quarter Rates
July-September
The 3rd quarter is here, July-September.     The DOI approved some rates, but rejected the rates for all the major HMO's.   Here is the story from the Boston Globe. 

Although you may see that rates were approved for Blue Cross, it was for their PPO product not the HMO Blue product.  The carriers were told to refile within 30 days and justify the rate requests. 

It looks like we are going to do this all over again for the third quarter.   Lets just hope that when all the rate fights for the 2nd and 3rd quarter are settled, there will not be any retro-active bills generated.
Rate Cap
Sounds good but...
There has been much debate about putting a rate cap on health insurance premiums.  As health brokers and small business-owners, we like the sound of that.  However, mandating a rate cap on insurance companies without any underlying reform to lower costs may put current insurance companies out of business and scare any new companies from coming to Massachusetts.  
 
What reforms are we referring to:
  1. Guarantee issue:  note block below
  2. State Mandates:  there are many state mandated benefits that smaller companies are not able to opt out of, while larger companies that self-insure can.  Let employers in the 1-50 marketplace have the same ability to decide whether or not they want to cover all the expensive state mandates.
  3. Prescription Coverage:    allow employers to buy coverage with no Drugs without violating the MCC (Minimum Credibility Coverage) and incurring a penalty.
 
These are just some basic changes that we feel will provide real relief to small businesses.   Putting an artificial rate cap, without real reform, may in the end eliminate competition and create higher rates for small businesess.

Here is an article from the MassLive website that discusses this issue.

COBRA Subsidy
May 31st current deadline
Employees involuntarily terminated after May 31st, are not eligible for the COBRA subsidy.   There are some proposals to extend this but none have been approved.
Guarantee issue 
Increases costs for all of us
As most of you know, Massachusetts in a "Guarantee Issue State". This means that employees can not be refused coverage due to a pre-existing condition.  This luxury, however comes at a price.  

Check out this article from Insurance and Financial Advisor. Specifically this one section:

"Under the state's health reform plan, the number of people who dropped their health coverage within six months quadrupled in the first three years of the state insurance program. Short-term buyers increased from 3,508 in 2006, the year the state's health reform law took effect, to 17,177 in 2008, the latest year for which data is available"

More and more people are gaming the system.   People will opt not to have coverage and pay the penalty, which is nominal when compared to the cost of the actual premium, and then sign up for coverage when they need it.   The worst thing is these short-term buyers have claims, which create losses for the insurance companies which then effect your premiums.

The Commonwealth of Massachusetts should run this no different then you run your business.  There should be an Annual Open Enrollment for people to enroll with an insurance company without medical questions.   The other 11 months per year, there should be full underwriting.