Support the news

Patrick Orders Insurers To Submit Rate Increases

This article is more than 11 years old.

Gov. Deval Patrick, positioning himself as the guardian of job-creating small businesses, said Wednesday he is ordering health insurers in Massachusetts to submit proposed small business rate increases for state review - and possible rejection.

Addressing the big-business Greater Boston Chamber of Commerce, the Democrat said an emergency regulation his administration was enacting would allow the state insurance commissioner to reject any rate increase considered "unreasonable or excessive."

And in an era when double-digit premium increases are commonplace, Patrick defined that number by saying any proposed increase greater than 3.2 percent - the current level of medical inflation - "will be challenged."

The regulation would apply to health plans for companies with 50 or fewer employees.

Patrick said he considered the proposal "aggressive," but added, "We have to give small businesses some economic breathing room."

He is simultaneously asking legislative leaders to pass a bill capping doctor and other provider cost increases at a similar level.

The leader of a major insurer, who doubles as chairman of a state association of health plan providers, said operating within such a cap would be difficult.

"I think the governor is dealing with the right problem; I think there may be a better way to do it, but, as he said, the conversation has to start - and it has started," said Tufts Health Plan President James Roosevelt Jr.

He and the industry group he leads, the Massachusetts Association of Health Plans, support a bill that would control provider cost increases and cut small business premiums by an estimated 22 percent.

Roosevelt said with 90 cents of every premium dollar going to providers - not insurers - provider costs must be contained if premium growth is to be controlled.

"What we have to deal with is the underlying cost," Roosevelt said. "I think we heard a very broad proposal that's a conversation starter, and the details will be important."

Patrick acknowledged the concern, but said he was determined to stop "this circular conversation" where parties acknowledges a problem but none takes the first step to solve it.

"The point is, we've got to stop acting like we can't ask hard questions any more and expect a good, thorough and persuasive answer," the governor said. "Because, while we have this circular debate, there are small businesses drowning under these double-digit premium increases."

The proposal was cheered by a small business representative.

Bill Vernon, Massachusetts director of the National Federation of Independent Businesses, said most companies have only one or two workers, and many no more than five. Confronted with skyrocketing health insurance costs, they often decide against hiring more workers.

"It certainly is a tax on creating new jobs," Vernon said.

Patrick received a glowing endorsement at the end of his remarks from the Chamber's president, Paul Guzzi, but the governor himself jokingly told the crowd he saw "the color drain out of their faces" as he addressed a group dotted with executives from Blue Cross Blue Shield, Tufts and other major health insurance providers.

Some in the crowd support one of Patrick's rivals next fall, Republican Charles Baker, who most recently headed a major insurer - Harvard Pilgrim Health Care.

At points sounding as if he was delivering a campaign speech, Patrick struck a populist chord - and tamped down speculation about higher ambitions.

"I'm not motivated by the usual things that motivate people in elected office," he said. "I'm not motivated by ambition for higher or other office, or by entitlement, or by powerful connections just urging me, you know, into public life. I am motivated by simple gratitude. ...I owe something. Gratitude makes me want to give something back."

This program aired on February 10, 2010. The audio for this program is not available.

Support the news