Massachusetts Insurance Division Rejects Rate Hikes

04/02/2010

Rising medical costs have put added pressure on insurance companies to satisfy their claims.

Many have responded by increasing health insurance premiums. Proposals by Massachusetts-based insurers to raise rates by 8 to 32 percent were recently rejected by the state's Division of Insurance, according to a report by the Boston Globe. Those who have already made payments under increased premiums would receive a rebate.

Health insurers for small businesses and individuals had proposed these hikes after job losses and plan reductions cut into their revenue.

"We're going to review all the options that are available to us," Lora Pellegrini, president of the Massachusetts Association of Health Plans, told the Globe. "At the end of the day, if we're not going to be allowed to have our prices cover our costs, that will be a problem for the whole industry."

Politics may be playing a role in the current negotiations, according to Pellegrini. Massachusetts governor Deval Patrick had previously promised to reject excessive hikes, while Republican gubernatorial candidate Charles Baker opposed rate caps.

The Massachusetts Health Reform Law of 2006 mandated universal health insurance. Since then, the state's coverage rate has soared to its current 97 percent.

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