Mass. Gov. Signs Bill Aimed At Health Care Costs

Gov. Deval Patrick has signed a bill he hailed as a way to help consumers and small businesses combat rising health care costs.

Legislation Patrick signed Tuesday forces insurers to spend almost 90 percent of their premium revenues on medical care instead of administrative costs. Legislators gave the bill final approval July 31, the last day of the legislative session.

Under the legislation, small businesses with less than 50 employers could form cooperatives to strengthen their purchasing power and health insurers would have to offer plans with low-cost health care providers in their networks.

The Patrick administration says the law saves small businesses up to 12 percent on premiums, which Patrick hopes will lead to economic growth.

"When those small businesses get those double-digit (premium) increases, it means that they can't add that one or two or three positions," the governor said. "And if they don't start hiring, we don't get a recovery. It is as simple as that."

The law also strengthens the state Division of Insurance's ability to reject health insurers' proposed rate increases.