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Health Insurance Standoff Intensifies

The Boston Globe reports on the intensifying standoff between state regulators and major insurance companies over proposed premium increases that the Massachusetts Insurance Commissioner deemed "excessive."

Yesterday, "most insurers stopped offering new coverage to small businesses and individuals, and state officials demanded that the insurers post updated rates online and resume offering policies by Friday," according to the Globe story.

Reporter Robert Weisman writes:

People seeking to buy health insurance for the first time, or customers looking to change policies, found they could not do so, at least temporarily.

The confusion — or market chaos, as one insurance industry official called it — followed the state Division of Insurance’s rejection last week of 235 of 274 premium increases proposed by insurers. The increases were for policies covering what is known as the small group market, which includes more than 800,000 people across Massachusetts.

Insurance Commissioner Joseph G. Murphy said he has asked insurers to quote rates for new coverage through the state’s Health Connector website by week’s end, and reminded them that they are required by law to do so. The new quotes would use base rates set last year, plus additional factors such as the age and size of a company’s workforce, Murphy said.

“If we don’t see the rates posted by the end of the week, we have a variety of enforcement tools at our disposal, including the ability to fine carriers,’’ warned Murphy. “It’s imperative that consumers have information available to them as they consider their purchasing options,’’ he said.

Health insurers, however, said they could not calculate new rates until a judge rules on their request for an injunction to prevent the state from continuing to block increases for the coverage period that started April 1. Insurance carriers had proposed premium rate increases averaging 8 to 32 percent, which the state found excessive. The case is expected to go before a Superior Court judge in Boston as early as tomorrow.

A consumer advocate from the nonprofit, Health Care For All, told the Globe that the move by insurers is "a fundamental violation of health reform in Massachusetts."

This program aired on April 7, 2010. The audio for this program is not available.

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