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Lawmakers Approve Bill To Make Health Insurance More Affordable

The Massachusetts Senate yesterday approved a plan that would require wealthier hospitals to contribute toward the cost of health insurance for small businesses, and allow those businesses to form co-ops to buy more affordable insurance, The Associated Press reports.

The AP says that:

Senate President Therese Murray said the bill, which passed on a 33-4 vote, will ease instability in the insurance market, smooth out annual fluctuations in premiums and require insurers offer affordable small business plans.

Under the bill, health insurers would have to file rate increases with the Division of Insurance three months before they are set to take effect. The division would be required to review the rates to see if proposed increases are reasonable.

Another part of the bill creates new yardsticks to help the public compare health care providers based on their costs and quality measures. Small businesses would be encouraged to adopt "wellness programs" designed to help workers avoid getting sick.

Contributions from hospitals would be determined by a specific formula, says Sarah Shemkus of the Cape Cod Times:

"Partners Healthcare, which runs seven hospitals in the state, including Massachusetts General, Brigham and Women's and those on Martha's Vineyard and Nantucket, would likely contribute more than $40 million," according to a proposed formula. "The legislation, in its first year, would also require insurers to spend at least 88 percent of their revenue on providing medical services; the ratio would go up to 90 percent in the law's second year. Another element of the bill would require insurers to adjust premiums for a customer's age every year, rather than every five years, the current standard practice. This change is intended to make costs increase slowly and steadily each year, rather than lurching up at each interval."

This program aired on May 19, 2010. The audio for this program is not available.

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