Massachusetts Gov. Deval Patrick asked the state legislature to grant his administration broad new authority to "review and reject" excessive rates charged by medical providers in hopes of curbing costs and making health care more affordable, The Boston Globe
reports. Under a bill filed Wednesday by Patrick, the rates that "hospitals and other health providers charge insurers would be 'presumptively disapproved as excessive' if they increased faster than the level of medical inflation, and they could be rejected after a public hearing." Insurance premium hikes that exceed 1.5 times medical inflation could also be rejected (Lazar, Levenson and Weisman, 2/11). GateHouse News Service/Dedham (Mass.) Transcript
: "Patrick told business leaders he would subject all health insurance rate increases to his insurance commissioner's discretion, and vowed that any increases 'significantly higher' than the 3.2 percent medical cost inflation would be 'challenged.'" The effort particularly targets small businesses, which Patrick said need "some economic breathing room." The state set rates until a deregulation push in the early 1990s, when health costs were slower. Lately, they've been swelling, prompting state officials to consider even broader payment reforms (O'Sullivan, 2/10).
"The proposal, which would effectively put premium rates under temporary government supervision, was harshly criticized yesterday by the insurance industry as an unworkable idea that will fail," the Boston Herald
reports. An insurance industry representative said, "I'm not sure this proposal will stop small business premium increases, because premiums reflect the cost of hospital services" (Fitzgerald and Grillo, 2/11).