MassCare: Ominous Developments in the Precursor to ObamaCare
So in early April, Governor Deval Patrick’s Division of Insurance rejected most of the rate increases for individual and small business plans which Mass insurers requested, marking the first time the state had flexed its authority in this way.
But, though most of us have a love/hate view of them, insurers are just the man in the middle. Note that Patrick’s action in freezing premiums, which meets with the approval of the Obama admin, did nothing to address the underlying reason for cost increases. What it did do is pile ever more losses on the industry which, as it was, had entered 2010 in the red.
Sure enough, six weeks later, in mid May,
The four major Massachusetts health insurers yesterday posted first-quarter losses totaling more than $150 million, with three of them blaming the bulk of the losses on the Patrick administration’s decision to cap rate increases for individuals and small businesses.
The carriers attributed $116 million of their $152 million in losses to the April 1 ruling by the state Division of Insurance to deny most proposed premium increases for the so-called small-group market.
The next step for the carriers, naturally, is to attempt to pass the losses along to providers.
Massachusetts health insurers say they want to freeze or slash payments to some hospitals and large physician groups this year, setting up the toughest contract negotiations in memory and creating the potential for disruptions in where patients get their care. …
Unlike in past years, insurers believe they have widespread backing from politicians, regulators, and employers to aggressively push back against large price increases, even if it means some unhappy providers drop out of insurers’ networks, forcing patients to find new doctors and hospitals.
Whoops. Sounds like Bay Staters may be on their way to losing their right to choose (… a doctor, anyway).
Now the latest development (h/t Michael Graham). The Patrick administration has moved to place three carriers into administrative oversight.
State officials said they sent letters to three health insurers earlier this year asking them to accept more intense oversight and supply additional data because of concerns about their financial health.
One of the insurance companies has agreed to administrative oversight, while regulators are negotiating details with the other two, the officials said. Administrative oversight is a first step regulators take when they determine there is a need to monitor the financial condition of insurance carriers more closely. It does not mean the companies are insolvent.
Officials said the heightened concern is related to the fragile economy, which caused several major insurers to lose money in 2009.
Really, a fragile economy? Or something else, like a government has taken a strangle-hold on your business? Michael Graham:
Was it really the “fragile economy” that’s causing Massachusetts insurance companies to go broke, as the Patrick administration claims? Or is it the lousy Romney-Care plan they’re working under, and the fact that more and more people are getting services they’re not paying for? Those costs are being shifted onto taxpayers and the insurance companies.
In Massachusetts, we are getting a real life preview of what will happen when, in four years, under Congress’ orders, MassCare becomes a national pandemic. It’s not pleasant. Can we please observe, learn and react accordingly, even if it means a “drastic” course change (back to the status quo)?