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The Politics Of Health Insurance Rates

News today that at least one health insurer — Harvard Pilgrim Health Care — can now raise premium rates for individuals and small businesses, despite a previous cap on rate hikes, underscores the key role that health insurance will play in the upcoming gubernatorial election.

The Boston Globe reports that an insurance appeals board overturned a rate cap that had been imposed on Harvard Pilgrim, the state's second largest insurer. (It also happens to be the insurer that Republican Charlie Baker presided over until he decided to run for governor.)

Reporters Jenn Abelson and Todd Wallack explain:

The three-member administrative panel — which consists of attorneys who work for the state Division of Insurance — found that rate increases Harvard Pilgrim initially sought in April are reasonable given what it must pay to hospitals and doctors.

That ruling trumped the Insurance Division’s earlier finding that the requested increases were excessive, a view that reflects Governor Deval Patrick’s campaign to curb health costs.

Insurers yesterday cheered the ruling, which bodes well for three other companies now before the appeals board with their own cases against capped rates.

The ruling is clearly a blow for Gov. Patrick, who denounced the decision and said it should be overturned, according to The Globe: “We cannot continue to let small businesses and working people be victimized by out-of-control insurance premium hikes,’’ Patrick said in a statement. “This fight is not over.’’

The specific battle over insurance rates has come to embody the larger race for governor. According to AP's report today:

The case has taken on a political tinge, as some of the state’s top insurance companies have alleged Patrick was challenging them both to appeal to middle-class voters and to undercut one of his leading re-election rivals, Republican Charles Baker.

Baker spent a decade as president of Harvard Pilgrim Health Care before resigning last July to run for governor. Patrick, a Democrat, has suggested Baker sides with the insurers in the ongoing dispute.

This program aired on June 25, 2010. The audio for this program is not available.

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