The Massachusetts Division of Insurance has rejected 235 of 274 rate increases proposed by health insurers for small groups.
State insurance commissioner Joseph G. Murphy disapproved the base rates–which called for increases of up to 32%–after determining that they were excessive and “unreasonable relative to the benefits provided.”
Consumer Watchdog, a consumer advocacy group, said the decision shows the need for effective prior-approval rate regulation in every state to ensure that health insurers charge fair prices under national health reform legislation.
The national health reform law is modeled on Massachusetts’ mandatory health insurance law.
Massachusetts regulators recently adopted emergency prior approval regulations in anticipation of large insurance premium increases, according to Consumer Watchdog.
The Obama administration and House Democratic officials wanted to include a provision that would have provided state health insurance regulators in states that have no rate control statutes the authority to ask the Department of Health and Human Services to reject such rates.
But the provision was dropped after the Senate parliamentarian ruled that 60 votes would have been needed to include such a provision in legislation in the Senate.