Heading for the Exits

Some states have learned when they put the squeeze on insurance carriers in an attempt to appear "consumer friendly," the carriers simply pick up their ball and bat and go home.

Lately we have heard a lot of saber rattling over premium rate increases. In fact, Obama and the clan used this as their drum beat to drive the vote on health insurance reform.

That, plus some heavy bribery in a vote buying scheme.

But I digress . . .

It seems the state of Massaconfusitts is following in the path of HHS Sebelius in trying to brow beat health insurance companies into submission over requested rate hikes.

Insurance Commissioner Joseph Murphy said he had disapproved 235 of 274 proposed rate increases because they included "excessive increases and rates unreasonable relative to the benefits provided."

Some of us know where this is headed.

If the carriers don't get what they need they will simply withdraw from the market. This happened with homeowners insurance in Florida. It happened in northern states when the DOI imposed suppressive underwriting rules combined with rate restrictions on health insurance.

Murphy's decision covered all 19 of the plan increases proposed by Blue Cross Blue Shield of Massachusetts, 63 of the 64 plan increases proposed by the Blue Cross HMO, all 47 proposed by Fallon Community Health Plan and all 36 proposed by Tufts Health Plan. The 33 plans offered by three out-of-state, for-profit insurers — Aetna, ConnectiCare and United HealthCare — all were approved. Each does relatively little business in Massachusetts.

There are some curious oddities in that quote.

Note that all requests for rate increases by FOR PROFIT insurers were granted.

Note also that they do "relatively little business" in MA.

I can speculate as to why it happened this way but I will let our readers form their own opinions.

Reading further this appears to be almost certainly political grandstanding and has no basis in sound principles of risk management and accounting.

If the denial stands one has to wonder where Massachutians will get their mandatory health insurance. It certainly won't be from the carriers who had their rate adjustments denied.

Smaller cars, fewer health insurance options, Poppa Washington.