Mass. Health Insurers Post Big Losses, Blame State Rate Cap

By Sacha Pfeiffer
May 17, 2010, 4:07 PM
3 Comments

BOSTON — The state’s four largest health insurers posted big first-quarter losses on Monday, and they’re blaming the lion’s share of those on the Patrick administration’s controversial decision to cap rate increases for small businesses and individuals.

Blue Cross Blue Shield of Massachusetts took the biggest hit, reporting a net loss for the quarter of just over $65 million (PDF). Tufts Health Plan says it lost nearly $52 million (Word Doc), with Harvard Pilgrim Health Care reporting a $27 million loss (PDF) and Fallon Community Health Plan reporting a $8.5 million loss (PDF).

The insurers blame most of their disappointing performances on losses they anticipate due to state regulators blocking premium hikes for small business and individual plans.

The Massachusetts Association of Health Plans, an industry group, wants the Patrick administration to end the rate cap, which it says does nothing to address the rising health care costs that are driving up premiums.

The losses reflected in the insurers’ quarterly financials relate to an ongoing dispute between the state and health insurers about setting premiums. Last month, the state Division of Insurance rejected the bulk of the premium increases proposed by insurers for plans covering individuals and small businesses, calling them unreasonably high. A Suffolk Superior Court judge later upheld the state’s decision to deny the rate hikes.

The insurers have said they could go out of business if they’re not allowed to increase premiums to their proposed 2010 rates.

The Massachusetts Senate President has stepped into the dispute, proposing a compromise plan meant to satisfy both insurers and small businesses. That plan also includes suggestions for how to reduce rising health care costs.

Please follow our community rules when engaging in comment discussion on wbur.org.

http://www.biddingforgood.com jon carson

“The insurers blame most of their disappointing performances on losses they ANTICIPATE due to state regulators blocking premium hikes for small business and individual plans.”

So, does this mean that in fact they have not incurred the losses? Feels like dodgy acctg to make a PR point.

We need the insurence companies to lean hard on the providers. If Partners can cough up $40m out of nowhere then it says a lot. A lot.

The problem is that the individual is a price-taker. It’s the insurence companies who have the negotiating power (but have heretofore been afraid to upset a very nice apple cart).
Fred T.

With the big 4 making their losses very visable, it makes you wonder if they’ll try to pass along the losses in the form of huge Corporate rate hikes again.
Cindy Wolfe

Hmmm, maybe since most of the folks they want to hike rates on haven’t gotten a raise in the last decade, they could show profits by paying everyone there the same thing they made ten years ago, as the rest of us seem to have to make due with about that.
How many of their CEO’s got well over 6 figures?
Could that be CUT?
I think they need to start doing what the rest of America has had to do, instead of thinking in terms of raking in MORE, figuring out how to make due themselves with a lot LESS.

Vt. Ski Resorts Await More Weather After Irene

Mass. Health Insurers Post Big Losses, Blame State Rate Cap