The state’s Division of Insurance has rejected 86 percent of rate increases insurance companies proposed for small businesses, including all of those filed by Worcester-based Fallon Community Health Plan.
The denial is part of broad regulatory authority the agency has in consumer protection.
In February Gov. Deval Patrick issued an emergency order requiring insurance companies to submit rate increases for small businesses to the state for review and possible disapproval 30 days before the rates go into effect.
Upon review, the Division of Insurance rejected 235 of the 274 rate increase requests because the increases were found to be “excessive” and “unreasonable.”
Below is a list of insurers with the number of rate filings rejected:
Fallon Community Health Plan – 47 out of 47 rejected
Blue Cross – 19 of 19 rejected
Tufts Health Plan – 36 of 36 rejected
Blue Cross Blue Shield HMO – 63 of 64 rejected
Harvard Pilgrim Health Care – 25 of 26 rejected
ConnectiCare – 0 of 24 rejected
FCHP deferred comment to the Massachusetts Association of Health Plans.In a statement, the MAHP said the division’s denials “fail to address the significant undelying reasons for the increases in health care costs.”
MAHP also said the Patrick administration and the division have identified a number of reasons for rising premiums, but those factors were ignored in the decision to deny rate increases.
The denials were primarily political and would “wreak havoc on the entire health care system,” MAHP said.
Insurers whose rate increases were rejected can file an appeal to the DOI’s decision, can make a new rate filing or keep old rates in place.
The DOI said it rejected increases that failed to explain why some providers were paid more than others or did not show proof that provider rates were renegotiated. Some rate increases were above the medical consumer price index, which automatically allows for disapproval by the state.
In a statement, Bill Vernon, the Massachusetts director of the National Federation of Independent Businesses, said that while the NFIB appreciates the administration’s attention to “the issue of cost,” the rate increase denials are only a short-term fix for small businesses.
Small businesses would be better served by expanded consumer access to information about costs and outcomes, expanded choice of insurance products that fit consumers’ needs, opportunities for small businesses to band together, fewer state mandates, high-deductible plans, and lawsuit abuse reform, Vernon said.
“Today’s announcement is an official admission that at least one wheel is falling off of the Massachusetts health care experiment,” Vernon said.
