Massachusetts Health Insurance Connector Asks Insurers To Limit Premium Increases

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The MassachusettsCommonwealth Health Insurance Connector on Tuesday voted to press insurers to hold premium increases to 5% in 2008 for unsubsidized health insurance plans sold in the state, the Boston Globe reports. According to the Globe, connector officials and health care analysts "agree that neither the state nor individuals will be able to afford coverage without aggressive price control." Connector staff estimated that without limits, premiums for Commonwealth Choice insurance would increase between 4% and 14% next year. Some connector board members said even a 5% premium increase might be too large.

The connector also instructed insurers to try to limit premium increases without shifting significant costs to plan members. The connector will ask insurers that cannot hold increases to 5% without changing benefits to submit an alternative plan detailing what benefit reductions or increases in copayments would be needed to meet the 5% limit.

Marylou Buyse, president of the Massachusetts Association of Health Plans, said, "Five percent is a really tough target," adding, "Premiums reflect the underlying cost of care, which is going up 8% to 10% (per year). If the plans are going to meet the 5% target, providers are going to have to scale back their demands."

The connector also has proposed several ways for insurers to hold down costs, including, steering patients to physicians and hospitals that provide lower-cost, high-quality care; encouraging the use of generic prescription drugs; and strengthening treatment and prevention programs for people with chronic illnesses (Dembner, Boston Globe, 12/5).

MAHP Recommendations

In related news, theMassachusetts Association of Health Plans on Monday made recommendationsintended to control rising health plan premiums and provide consumers with moreinformation about why rates increase, the Globe reports. The group also asked thestate Legislature to hold annual hearings during which insurers would have todefend any rate increases.

The association recommended that member health plans voluntarily disclosefinancial information in an easy-to-read format, that insurers ask for publicforums to discuss rate increases and that lawmakers pass 17 health care laws,including legislation that would require medical facilities to reportpreventable errors. The association this week plans to discloseeasy-to-understand data for member plans on its Web site.

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Richard Lord -- CEO of Associated Industries ofMassachusetts, thestate's largest business lobby -- said, "There's a real concern that if wedon't address the cost problem, our reform effort will not succeed, andeveryone has invested a lot to make the law succeed." Marylou Buyse,president of MAHP, in a statement said, "Consumers, employers, and thestate depend on those of us in health care to keep health care affordable"(Krasner, Boston Globe, 12/4).

Boston MedicalCenter HealthNet Plan

Boston Medical Center HealthNet Plan, the largest insurer ofbeneficiaries in the state's subsidized coverage plan, faces sanctions and apossible investigation by the state attorney general for attempting to"poach" beneficiaries from other insurers, the Globe reports. Boston Medical Center last month sent letters to 2,600 patients that incorrectly implied theycould get care at BMC only if they enrolled in HealthNet, the hospital'sinsurance plan. The letter stated, "To continue getting your care at BostonMedicalCenter, now is the timeto switch."

According to the Commonwealth Health Insurance Connector, which oversees thestate plan, the language in the letter and the direct approach to beneficiariesenrolled in other plans violated HealthNet's state contract, which prohibitsinsurers from directly soliciting beneficiaries of other plans.

The Globe reports that BostonMedicalCenterand the state are contacting patients to confirm that they have accurateinformation about access to care and providers, which also include Network Health, NeighborhoodHealth Plan and Fallon Community Health Plan.

Jean Haynes, HealthNet's executive director, in a statement issued Monday said,"Both Boston Medical Center HealthNet Plan and Boston Medical Center aredeeply sorry for any confusion this incident has caused to Commonwealth Caremembers," adding, "Both the health plan and the hospital areimplementing procedures to avoid a repeat of such an occurrence."

According to a letter received by HealthNet, the state will penalize theinsurer by reducing the number of beneficiaries it covers. In addition,Attorney General Martha Coakley's (D) office is reviewing the insurer's actions to determine ifHealthNet violated state consumer protection law, according to a spokespersonfor Coakley. The state also has notified the federal government, which helpsfund the plan (Dembner, Boston Globe, 12/4).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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