For Immediate Release - February 21, 2010

Governor Patrick Keeps Focus On Reducing Small Business Health Care Costs, Launches Second Set Of Hearings

Insurance Commissioner to lead statewide sessions with business leaders; Effort part of Governor's work to improve business climate, create jobs

BOSTON - Sunday, February 21, 2010 - Continuing his focus on reducing small business health care costs, Governor Deval Patrick today announced that the Commissioner of Insurance will launch a second set of hearings to review the double-digit premium increases burdening small businesses across Massachusetts. This effort - the latest in a series of initiatives the Governor has introduced to improve the state's business climate - is designed to control costs and fuel the job creation that will drive the Commonwealth's economic recovery.

"Small businesses and working families need relief from skyrocketing health care costs and they need it now," said Governor Patrick.

The hearings will take place on Monday, March 1st in Hyannis; Tuesday, March 2nd in Boston; Wednesday, March 3rd in Pittsfield; Thursday, March 4th in Lawrence; Friday, March 5th in Framingham; and Monday, March 8th in Fitchburg. Locations will be available later this week at www.mass.gov/doi .

"These sessions with business leaders will continue our conversations with a variety of stakeholders about the root causes of premium increases," said Insurance Commissioner Joseph G. Murphy.

"In this tough economy, small businesses and their employees have been disproportionately hit with double digit health insurance premium increases, the levels of which have not been felt by big business and big government purchasers," said Jon Hurst, President of the Retailers Association of Massachusetts. "At a time when we require everyone to have health insurance, it is imperative that we have the tools available to make insurers give small employers comparable coverage for comparable premiums. We thank the Governor for making this a top priority of his Administration."

At the Governor's direction, the Division of Insurance launched its first set of statewide hearings in November. The hearings, which took place in Lowell, Bridgewater, Worcester, Springfield and Boston, examined factors that are leading to health insurance premium increases, concentrating on small group premiums and actions that carriers are taking to address costs.

Simultaneously, the Division held a series of special sessions on group purchasing cooperatives. The cooperatives would allow small businesses and individuals to combine their purchasing power and seek lower premiums through a larger entity, while also including protection from membership restrictions and allowing the cooperatives to choose and sponsor their own health products and health promotions.

In an address to the Greater Boston of Chamber of Commerce on February 10 th, Governor Patrick unveiled his small business jobs incentive plan aimed at helping small businesses hire new workers and reduce the cost of doing business. The proposal includes the following measures designed to control health care costs:

  • Using existing authority, the Governor directed the Insurance Commissioner to immediately file an emergency regulation requiring health insurance companies to file proposed changes in small business premiums with the Division of Insurance in advance of their taking effect so the Commissioner can review and disapprove rates that are excessive or unreasonable in relation to the benefit provided.
  • Legislation to trigger a presumptive disapproval of health insurer rates that are significantly above the Consumer Price Index for Medical Services. The Governor's bill also provides for similar oversight of provider rates to ensure shared responsibility for controlling costs.
  • Gives smaller companies the choice of more affordable plans beginning this July by requiring health insurance carriers in the small group market to offer at least one selective network plan with premiums that are at least 10 percent lower than the premiums for the full network product. The Governor's proposal also allows insurers to set up bi-annual open enrollment periods to encourage people to get and keep health insurance.
  • Grants the Insurance Commissioner the authority to examine small business health insurance premiums and prevent any duplicative or unjustified administrative charges that drive up costs for small businesses. The Governor's plan also empowers the Commissioner to protect small businesses from drastic increases in their premiums driven by changes in the composition of their workforces (particularly the age of their workforces).

Governor Patrick has maintained a strong focus on creating the conditions for business growth and job creation since the start of his administration. The Governor has lowered the corporate tax rate, streamlined permitting and cut state permitting time to six months or less and invested in the state's broken roads and bridges by putting people to work on hundreds of infrastructure projects across the state.

Additionally, he has invested in the Life Sciences, Clean Energy and other innovation industries that promise to be the Commonwealth's anchor employers of tomorrow and are driving the state's recovery today. Just last week, the Governor signed legislation to provide immediate relief to Massachusetts businesses by freezing their contributions to the Unemployment Insurance Trust Fund at current levels. The new law prevents a scheduled rate hike from taking effect, saving businesses almost $400 million this year. Learn more about the Governor's efforts at www.mass.gov/governor/jobs.

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