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Thursday, April 1, 2010  

Health Insurance Companies Facing More Political Attack

When President Obama seized on the 39% increases in premiums for individual health insurance in California as an example of over-inflated insurance pricing, he probably didn't know he was igniting a trend.

At least, that's what it's starting to look like.

Health insurance companies are facing even more scrutiny over price hikes, and in Massachusetts an usual law on the books is making it difficult for them to raise prices at all.

The New York Times' piece on Massachusetts' health insurance reveals that Governor Deval Patrick has given his insurance regulators the go-ahead in an "extraordinary" move that denies many health insurance companies the right to raise their rates for 2010.

In most cases, including California where Anthem Blue Cross' rate hikes gained so much attention, the state has no legal ability to control the rate increases designated by health insurance companies unless the companies themselves aren't allocating enough to actual health care.

But in Massachusetts, the power to disapprove rate increases has been available to the insurance commissioner since 1977, it just hasn't been used until now.

The Governor claims that his office only rejected rate increases that significantly exceeded the inflation rate of 5.1%.

Health insurance companies are claiming that their rate increases reflect the rising costs of medicine, and that by rejecting rate increases they will be forced to take those costs back in other ways.

There is also some speculation that the Governor's unusual move is motivated by the upcoming election that pits him against a health insurance executive.

Mr.Patrick went on to suggest that the price controls should only be a temporary measure until legislation can be designed that will control the rising costs of health care, and "restructure the way doctors and hospitals are paid."



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