Playing Politics
Almost immediately after the Patrick administration announced that it had denied the vast majority of premium increases proposed by the state’s various health insurers for their small business and individual customers, the National Federation of Independent Businesses came out against the plan.
That should be a pretty clear indication that Gov. Deval Patrick has put the state Division of Insurance on the wrong track toward curing what ails Massachusetts’ expensive near-universal health care system.
The NFIB is a small business advocacy group that has an office in Boston. So, it’s significant that it would downplay the potential cost savings the DOI’s denial could provide small businesses in order to rip the plan.
“While we appreciate the governor’s attention to the cost issue, the solution offers short-term relief at best to long-suffering small businesses,” Bill Vernon, the state’s NFIB director, said.
Election Year
There’s almost no way Patrick can convince even the slightly jaded or incredulous businessman that this action is anything but political. Health care costs in Massachusetts continue to accelerate like a runaway train and Patrick wants to portray Charles Baker, his Republican opponent for governor and former CEO of Harvard Pilgrim Health Care, as the conductor.
Harvard Pilgrim filed 26 rate increases between 8.3 percent and 12.6 percent and 25 of those filings were “disapproved” by the DOI.
It is unfortunate that Patrick, who we’ve praised for his willingness to break with the political norm on several issues, is willing to indulge in the abject politics of health care policy while small businesses around the state face premium increases of as much as 35 percent.
It is also unfortunate that Patrick’s approach to the problem is the same as that used by the administration of President Barack Obama.
A glitch in the Medicare Part D plan for seniors causes some people to be vastly overcharged for certain medications. Obama’s health care reform law doesn’t fix the glitch, it provides a subsidy to seniors who are overcharged.
It’s this kind of layering of counter-regulation upon regulation upon program that infuriates businesses and individuals alike and makes the system a house of cards.
Hopefully, now it can serve as a message to both the Patrick and the Obama administration that what they’ve done is tweak health care rather than truly reform it. At some point in the near future, both administrations will realize that their health care reform initiatives are unsustainable and far too costly.
Insurance companies are rightly criticized for a running bureaucratic protection racket that sucks tremendous amounts of money out of a system intended to mitigate risk for their customers.
But under Massachusetts’ reform law, insurance company losses have been steep. Fallon Community Health Plan, which is based in Worcester, proposed 47 rate increases between 21 percent and 35 percent for small businesses and individuals and each one was denied.
Is charging a small business 21 percent more for its existing health insurance plan fair? No, but neither is a state insurance law that sends FCHP from a profit of nearly $7 million in 2008 to a loss of nearly $30 million in 2009.
It is very difficult for doctors and insurance companies to cope with the expense of complying with the state’s health care system, but it’s even more difficult for small businesses and individuals.
Six health insurers have sued the state to reverse the disapprovals issued earlier this month. All indications are that health care will get more expensive, ungainly and ugly before it gets better through common sense measures like tort reform, more opportunities for small businesses to band together to negotiate en masse and greater availability of high-deductible plans.
Perhaps even more dramatic would be the courage on the part of either the Patrick administration or the Obama administration to usher in a new system that either allows individuals to purchase health insurance on the open market and take that insurance with them from job to job, or true single-payer insurance in which the government pays for care at private hospitals.
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