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Governor Patrick's Health Insurance Plan - Right Objective, Wrong Approach

Posted by Rick Lord on Feb 10, 2010 5:03:00 PM

Associated Industries of Massachusetts knows better than anyone the frustration felt by Massachusetts employers with inexorably rising health insurance premiums that restrict job growth and economic opportunity. We therefore commend Governor Deval Patrick for his willingness to address the issue - the governor today announced that the state would essentially limit health insurance rate increases for small business to the 3.2 percent rate of medical inflation.

Governor Patrick is also seeking the limit rate increases for hospitals, physicians, medical imaging centers and other health-care providers. The governor has the authority to control insurance premium rates administratively, but needs legislative approval to review rates for providers.

There are positive and innovative elements to the governor's proposal, including a suspension of new mandated health insurance benefit requirements until July 12, 2012. Another provision would require carriers in the small group market to offer at least one reduced network plan with premiums that are at least 10 percent lower than the premiums for the full network product.

But good intentions will not solve the health insurance cost problem in the long term and neither will an arbitrary cap on premium increases. AIM's longstanding involvement in trying to break the choke hold of rising health costs on employers has taught us that any lasting resolution will involve a mix of structural payment reform and a comprehensive long-term strategy for improving the health care outcomes through an efficient and valuable health care delivery system.

While AIM does not support rate setting generally, we do agree with the governor's goal of creating a sense of urgency and making sure that all stakeholders earnestly work to achieve a more efficient, rational health care delivery system. For too long the discussion has focused on all the reasons to not change our health care system and this inertia has cost employers greatly. To the extent that the administration is putting pressure on insurers and providers to be part of the solution, we support his efforts.

Topics: AIM, Health Insurance, Massachusetts, Govenor Patrick

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