As the race for the Massachusetts governor's office ensues, incumbent Gov. Deval L. Patrick wields his power to deny insurance company rate hikes. Although well-intended, three out of the four largest insurers in Massachusetts reported operating losses last year.
It appears this mess is turning into a circular firing squad, as all stakeholders were once united in the effort to provide universal healthcare. Although the insurers are requesting rate hikes of 7-34%, the state insurance commission believes this is way out of line relative to the regional medical inflation rate of 5%. The insurance lobby states that the real culprit is the Massachusetts medical system. The New York Times reports that a Boston University study recently found that hospital costs per Massachusetts resident were 55 percent higher than the national average. An investigation this year by the state attorney general concluded that the pricing leverage exerted by academic medical centers played a major role.
Lora M. Pellegrini, the president of the Massachusetts Association of Health Plans, called the denials “a very reckless act” and warned that insurers on thin margins might have trouble paying claims.
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