Massachusetts agrees with state’s largest private health insurer in premium dispute

Mass. settles with insurer in premium dispute

BOSTON — Gov. Deval Patrick’s administration reached an agreement Thursday with the state’s largest private health care insurer on premium increases for small businesses and individuals, resolving a part of the ongoing tussle between state regulators and insurers.

The Massachusetts Division of Insurance agreed that Blue Cross Blue Shield of Massachusetts can increase its rates by 0.4 percent to 12.9 percent on Sept. 1. The insurer had originally asked to increase rates 1.7 percent to 22.6 percent, but the state rejected increases of 9.3 percent and above.

“We are pleased to be able to reach a settlement with Blue Cross Blue Shield that is good for everyone involved,” Insurance Commissioner Joseph G. Murphy said in a statement.

The agreement is the state’s fourth with insurers since April 1, when the Division of Insurance rejected 235 of 274 rate changes filed by the state’s health insurers because the agency viewed them as excessive. Some of the insurers appealed the decision.

The administration says the settlement will help small businesses and individuals representing 400,000 people across the state combat rising health care costs.

“The economic emergency caused by increasing health care costs has deeply affected small businesses and working families, and we are pleased Blue Cross-Blue Shield worked with us on an immediate solution to ease that burden,” Barbara Anthony, a consumer affairs undersecretary, said in a statement.

Blue Cross agreed to the lower rates to “help move the community beyond the distraction of arbitrary caps on premiums and toward more meaningful and sustainable solutions that will bring real and lasting rate relief to employers and individuals,” President and CEO Bill Van Faasen said in a statement.

Van Faasen said more focus should be placed on the high costs and use of medical care, which he said are the main causes for annual premium increases. The CEO also said the new rates should help stabilize the market and end the confusion for customers.

The state initially rejected 72 of the 73 rate increase filings from Blue Cross.

Patrick thanked Blue Cross-Blue Shield and the other insurers who have agreed to rate increase deals.

“Skyrocketing premium increases, year after year, are nothing short of an economic emergency and I am committed to working with all stakeholders — insurers and providers — to develop immediate and long term solutions,” he said.

The state settled with Tufts Health Care Plan, the state’s third-largest insurer, on Monday and has also reached agreements with Harvard Pilgrim Health Plan and Neighborhood Health Plan.

The agreements now in place cover 90 percent of the state’s small businesses and working families insured in the merged market, the state said.

The Blue Cross settlement comes just days after legislators passed a bill strengthening the Division of Insurance’s ability to reject health insurers’ proposed rate increases. Insurers would have to prove that no less than 88 percent of premiums goes toward paying for medical costs when filing rate increase requests. Otherwise, the requests will be rejected.

(This version corrects original rates increase figures and which ones were rejected.)