State To Insurers: Offer A Cheaper Plan Or Else

State officials threatened health insurers with legal sanctions if they don't offer a lower-priced plan for small businesses, The Boston Globe reports.

Reporter Beth Healey explains:

In letters to the chief executives of the Commonwealth’s dominant health insurers, Glen M. Shor, executive director of the state’s Health Insurance Connector Authority, pressed the companies to participate in the state’s small-business program. If they don’t, he wrote, “we will consider any and all legal avenues available to us to ensure that contractual obligations are met.’’

The insurers — Harvard Pilgrim Health Care, Tufts Health Plan, Blue Cross Blue Shield of Massachusetts, and Fallon Community Health Plan — balked at providing their plans through the state after the Massachusetts insurance commissioner capped the rates they can charge at 2009 levels. The insurers had sought doubt-digit increases for those rates, and have argued that they will lose money on the capped rates.

“Given the rate cap that the administration has imposed on the health plans, none of them are in a position to enter into any kind of new endeavors with the state at this time,’’ said Eric Linzer, spokesman for the Massachusetts Association of Health Plans, a trade group for the health insurers.

And the battle continues...