A year after insurers battled over premium increases with Governor Deval Patrick in Massachusetts, they are now seeking to increase rates by 10% or less. Insurers struggled with the Governor after proposing rate increase between 12% and 25%. This unsettled the community and the ensuing battle lasted for five months. In an effort to avoid another stand-off, the companies are limiting themselves to mostly single digit increases.
“The dynamic has been changed for health care in this state,” says Barbara Anthony, undersecretary of consumer affairs and business regulation in Massachusetts. “We established firmly that the Patrick administration is not going to tolerate double-digit rate increases.”
Insurers suspect that they will lose money this year in the small-group insurance market, just as they had lost money last year due to the struggle with the Governor. They are concerned that they will not be able to generate enough money to cover the costs associated with medical procedures.
Jay McQuaide, vice president of Blue Cross Blue Shield of Massachusetts, said that the insurer’s coming 9.2% rate increase is inadequate. He asserts that the rates will not be sufficient enough to cover the medical costs of policyholders. McQuaide has said that the company is sensitive to the need for affordable care, but wants a more practical solution.
There is growing pressure on the hospitals and doctors as the insurers begin to take a hard stance in contracts. They are being urged by both the insurance industry and the Patrick administration to be proactive in finding ways to lower the cost of care.