The Boston Globe
: Four of Massachusetts largest health insurers posted first-quarter losses with three blaming Gov. Deval Patrick's rate increase caps for the bulk of the financial hit that totaled more than $150 million.
"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. That category covers 800,000 residents who are self-insured or employed by companies with 50 or fewer employees." State officials say they are protecting consumers, but the industry says it is being unfairly blamed for higher medical costs. Indeed, officials say they are trying to help insurers "remain solvent while state officials try to engage insurers, hospitals, and doctors to tackle the issue of costs. That effort got a fresh boost yesterday from another state report that disclosed that many of the state's biggest health providers are sitting on large reserve funds, some in excess of $1 billion. At the same time, the state Senate is preparing to vote on a proposal that would require many hospitals to make one-time contributions totaling $100 million to help small businesses pay for health insurance" (Weisman, 5/18). Boston Herald
: Some of the proposed rate increases from insurers were as high as 32 percent. "Insurers have been stuck with last year's premiums as of April 1. That date came after the first quarter ended, but the HMOs made accounting adjustments they say are necessary to offset premium payments that will fall short of the actual costs for benefits. Blue Cross Blue Shield, for example, said $55 million of its $65.2 million quarterly loss covered 'expected future losses caused by inadequate premium rates'" (5/18). The (Quincy, Mass.) Patriot Ledger
: "All four insurers are nonprofit organizations, meaning they don't return excess profits to shareholders. But they still strive to break even or turn a profit to keep their finances stable. They are pursuing appeals to overturn the caps, including a lawsuit the insurers filed in Suffolk Superior Court last month" (Chesto, 5/18). The Boston Globe
, in a separate story: "Tufts Health Plan reported an operating loss surging to $59 million from $16.5 million during the same period last year. Harvard Pilgrim Health Care's operating loss jumped fourfold to $28.6 million. The operating loss at Fallon Community Health Plan climbed to $10.8 million from $1.3 million. A couple of things make those numbers confusing. First, health insurers usually earn investment income on their surplus funds, gains that dampen the impact of operating losses. After accounting for investment income, the net losses at each of the four big Massachusetts insurers were smaller than operating red ink would suggest. More important, insurers used different accounting methods to measure the current and future impact of the rate dispute." For instance, insurers are reporting a loss figure on what it expects the impact of the rate dispute will be on its bottom line through the end of the year (Syre, 5/18).