For Immediate Release - June 04, 2010

Patrick-Murray Administration's Division of Insurance Reaches Settlement on Lowered Neighborhood Health Plan Rates

Agreement avoids 11 percent increase for plan members; furthers Governor Patrick's efforts to provide emergency relief to small businesses & working families

BOSTON - June 4, 2010 - The Patrick-Murray Administration's Division of Insurance announced today a settlement with Neighborhood Health Plan on small group health plan base rates.

The settlement creates an overall blended base rate increase of 7.7 percent across all the company's products. Thousands of small businesses and working families will pay rates that are significantly lower than the increases that the company originally filed for many of its products.

"We appreciate Neighborhood Health Plan's decision to work cooperatively with the Division of Insurance to reach an agreement that is beneficial to everyone involved," said Joseph G. Murphy, the Commissioner of the Division of Insurance. "This is certainly good news for the small businesses and individuals who desperately needed a break from escalating health-care costs."

On April 1, the Division of Insurance disapproved 235 of 274 base rate changes filed by carriers, finding them to be excessive and unreasonable. Four of the 19 filings by Neighborhood Health Plan were disapproved. The company's request for a 6.9 percent increase was not disapproved, while its request for an 11 percent hike was disapproved.

In February, Governor Patrick directed the Division of Insurance to use existing powers to disapprove small business health insurance rate increase filings that were excessive or unreasonable. Governor Patrick also proposed comprehensive legislation that includes a number of reforms designed to lower health care rates charged by carriers and providers.

Today's agreement applies to premiums for new and renewal business for the annual contract periods from June 1 through December 31. The agreement is not retroactive, and will not disturb the lower rates paid by small businesses in April and May. Also as part of the agreement, Neighborhood Health Plan will discontinue its appeal of its rate increases for April 1 and removes itself from the lawsuit filed by carriers in Suffolk Superior Court. Following the Division's disapproval of 235 filings in April, the carriers were denied injunctive relief in Suffolk Superior Court.

"This is an economic emergency for small businesses and individuals, who have been financially strapped by the rapid escalation of health-care costs," said Barbara Anthony, the Undersecretary of the Office of Consumer Affairs. "We continue to work with carriers on their rate filings, and the Patrick-Murray Administration continues its efforts with all stakeholders, including insurers and providers, to bring long-term relief to small businesses and working families."

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.