Gov. Patrick imposes price controls on money-losing health insurers 

Is Gov. Deval Patrick, D-Mass., setting the stage for a “Mass Exodus” by health insurers?

From the Boston Globe:

Making good on Governor Deval Patrick’s promise to reject health insurance rate hikes deemed excessive, the state Division of Insurance this morning turned down 235 of 274 increases proposed by Massachusetts health insurers for small businesses and individuals….The insurance division, in letters to insurers, outlined reasons for the disapprovals. Among them were proposing rates significantly above the medical consumer price index – a measure estimated at 4.8 percent – and failing to explain how different health care providers were paid different rates of reimbursement….

Three of the four largest nonprofit health insurance carriers posted operating losses in 2009 due to job cuts at businesses that buy health insurance, increased use of medical services by employees fearful of losing benefits, and the slumping value of investments.

“We’re going to review all the options that are available to us,” Pellegrini said. “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.”

Even non-profits, which dominate the health insurance industry in Massachusetts, cannot afford to take annual losses.

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