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A Call To Freeze Health Care Premiums

Dan Smith, left, senior pastor at First Church Congregational in Cambridge, and Sarah Higginbotham say outrageous health insurance premium increases must stop. (Martha Bebinger/WBUR)

BOSTON — Sarah Higginbotham has a health insurance story that is becoming all too familiar. Three years ago, when she was still single, she took home $900-plus every other week from her part-time job, after paying her share of her health insurance premium. Then Higginbotham got married, had a child and switched to a family plan.

“My paycheck has dwindled to $164 every two weeks,” she said with a look that shows she still can’t quite believe it. “Basically I’m working for my health insurance here.”

Higginbotham’s dramatic drop in take-home pay wasn’t just a result of moving from individual to family coverage. Her employer, First Church Congregational in Cambridge, saw premiums rise 17 percent this year, an increase senior pastor Dan Smith calls outrageous.

“People who have felt that the market could somehow regulate it [insurance rates] are being proved wrong right now,” Smith said, his deep voice rising. “When we sit down with some of the leaders in the health care industry, we wonder if they do feel the pain that some of us are feeling.”

To share the pain, the Greater Boston Interfaith Organization (GBIO) and Health Care for All are proposing what they call a bold step: They want a one-year statewide freeze on the cost of health insurance.

“When we sit down with some of the leaders in the health care industry, we wonder if they do feel the pain that some of us are feeling.”
– Pastor Dan Smith, First Church Congregational in Cambridge

“The current escalating costs of health care are unsustainable,” said Health Care for All Director Amy Whitcomb Slemmer. “So we are asking all the interested parties to take a time out until we can get to a more comprehensive solution.”

During a one-year premium freeze, the two groups pledge to educate consumers about how to improve their health, become more savvy health care spenders and lower costs. They want insurers and providers to renegotiate existing contracts. And they hope, by the end of 2012, all parties will agree to a long-term health care cost control approach.

“We agree with the goals of bending the trend, but this technique is just not workable,” said Lynn Nicholas, president of the Massachusetts Hospital Association.

Nicholas said freezing premiums is “not workable” because hospitals have financial commitments through their complex contracts that can’t be reworked for one year. A better approach, she said, would be to agree on a goal for health care spending increases.

“We should be setting targets, we should have some oversight towards those targets and then let providers and others work aggressively to get there,” Nicholas said.

Insurers say their profit margin is already regulated at under 2 percent. But they are ready to go back to the table with hospitals and physicians, especially those that are paid more for the same quality of care, and look for ways to save money.

“We could definitely bend the cost trend if we were able to get some relief from the provider community,” said Lora Pellegrini, president of the Massachusetts Association of Health Plans. “Whether we could make rates zero or freeze them, I’m not sure that’s possible, but we could have a much better result than we’re seeing today.”

GBIO and Health Care for All were key players in passing and maintaining support for the state’s health coverage law. Now, GBIO President Hurman Hamilton said, it’s time to lead the health care costs debate.

“I just want to underscore the moral outrage and urgency of stopping double-digit increases and finding a solution that mandates that all of us do our fair share to drive down costs,” Hamilton said.

There’s a lot of agreement on the need to reduce health care spending, but little agreement on what it means for everyone to do their fair share.

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