Posted on 09 Apr 2010
Suffolk Superior Court judge today adjourned a two-hour hearing without ruling on a request by six Massachusetts health insurers to reinstate premium rate increases rejected by the state last week.
Judge Stephen E. Neel said he expected to rule by tomorrow or Monday on the insurers' request for a preliminary injunction that would allow them to go ahead with charging higher rates for individuals and small businesses.
Insurance commissioner Joseph G. Murphy's decision to reject the double-digit rate increases was "arbitrary and capricious," said Dean Richlin, an attorney representing the health insurers.
"Insurers are required either to submit to confiscatory rates or to go out of business," he said.
But assistant attorney general David Guberman said the court had no jurisdiction in the case because the insurers had not exhausted the administrative appeals process within the state division of insurance.
Last week, the state Division of Insurance rejected insurers' proposed base rate increases for individuals and small businesses averaging 8 to 32 percent, in what is known as the small group market. The category includes about 800,000 Massachusetts residents.
Prior to the state turning down the higher rates, the insurance companies posted them on the Commonwealth Health Insurance Connector Authority's website, www.mahealthconnector.org. The site was set up under the 2006 Massachusetts health care overhaul to help residents buy insurance. After the state refused to accept the higher rates, it ordered insurers to pull them from the site. The new rates were supposed to take effect April 1.
As a result of the standoff between the state and insurers, residents and small businesses shopping for insurance, as well as those seeking to buy new policies, have been unable to get quotes for new coverage this week.
Yesterday, Blue Cross Blue Shield of Massachusetts -- the state's largest health insurer -- and Tufts Health Plan said they will, as ordered by the Division of Insurance, resume making new policies available for the small group market -- using last year's base rates, not the requested double-digit increases rejected the state rejected. The companies said they were not sure the new prices will be ready by tomorrow, as the state wants.
Harvard Pilgrim Health Care and Fallon Community Health Plan have not committed to offering new rates by tomorrow -- despite the insurance commissioner's stern warning that the law requires them to do so.