For Immediate Release - August 18, 2010

Patrick-Murray Administration's Division of Insurance Reaches Rate Agreement with Health New England, Bringing Relief to 21,000 Western Massachusetts Consumers

Fifth insurer agreement means 93 percent of the 800,000 people who get their health insurance through a small business or as an individual have seen savings

BOSTON - August 17, 2010 - The Patrick-Murray Administration's Division of Insurance today announced a rate agreement with Health New England, bringing lower rate increases to 21,000 Western Massachusetts consumers and continuing the effort to bring an end to the shock of high health-care cost increases to working families and small businesses. This is the fifth rate agreement between the Administration and insurers that cover approximately 93 percent of the more than 800,000 people who get their health insurance through a small business or as an individual.

"We are pleased that Health New England was able to work cooperatively with us to find a solution that provides immediate relief to their consumers," said Joseph G. Murphy, the Commissioner of the Division of Insurance. "We have reached agreements that cover over 90 percent of the market, and we continue to discuss potential long-term solutions with Health New England, other carriers, and providers and other stakeholders."

The agreement with Health New England, a Western Massachusetts-based HMO that has almost 21,000 covered lives in its small-group plans and which recently had rates lower than some other carriers, includes an average blended base rate increase of 8.2 percent before benefit level adjustment factors are entered. The effective blended rates, including the benefit level adjustment factors, will range from 8.3 percent to 14.7 percent. Originally, Health New England sought increases of 11.5 percent to 21.3 percent.

The agreement goes back to April 1, 2010, and extends through the end of this year. As with previous agreements, Health New England will not retroactively bill rate increases to consumers who renewed their policy or bought a new policy from April through August.

On April 1, 234 of 275 base rate changes filed by carriers were disapproved by the Division of Insurance, including 30 proposed increases from Health New England. In February, Governor Deval Patrick directed the Division of Insurance to use existing powers to disapprove small business rate increase filings that were excessive or unreasonable. At the time, Governor Patrick also proposed comprehensive legislation that includes a number of reforms designed to lower health-care rates charged by carriers and providers. Many of those provisions were included in legislation passed by the Legislature in July and signed by the Governor on Aug. 10.

Health New England had appealed its disapprovals before a panel of Division of Insurance hearing officers. The settlement brings an end to the appeal and removes Health New England from the continuing lawsuit filed by carriers in Suffolk Superior Court.

"On April 1, many small businesses and working families were looking at base-rate increases that were 20 or 30 percent. These agreements are bringing average blended rates into the single-digits, and easing the economic emergency caused by the rapid escalation of health-care costs," said Barbara Anthony, the Undersecretary of the Office of Consumer Affairs and Business Regulation. "Our work is not done, as we continue our discussions with other carriers, and the Patrick-Murray Administration continues its efforts with all stakeholders, including carriers and providers, to find long-term solutions to this problem."

For more information on the Division of Insurance and the review of health insurance costs, visit www.mass.gov/doi. The website includes stories from small-business owners struggling with insurance costs, and source information including testimony from Division's hearings across the state. The Division of Insurance is an agency within the Office of Consumer Affairs and Business Regulation. Follow the Office at www.mass.gov/consumer, its Consumer Connections Blog and at its Twitter feed, @Mass_Consumer.