Health insurance rate hike should be reviewed

Health Care for All calls for hearing process

HEALTH CARE FOR ALL is deeply concerned about the 8 percent increase in health insurance premiums approved for the coming year, and believes such a rate hike needs to be the focus of public, transparent hearings.

In 2020, the use of health care services has been lower than expected due to the COVID-19 pandemic, and reports show that health insurers have seen significant increases in revenue and profits as a result. Raising premiums by an average of 8 percent, and even 12 percent in some cases, will hit families hard at a time when many residents in the Commonwealth are already struggling to make ends meet.

An Arlington resident, for example, reached out to our branded HelpLine to understand the health coverage options available to him and his family after his wife lost her job due COVID-19. Even the most basic plan seems to be out of reach, as it carries a $900 monthly premium.

In Massachusetts, we are fortunate to have a strong Division of Insurance and our insurance market is largely dominated by local or regional nonprofit health insurance carriers. However, as this year shows, the rate review and approval process is not able to work as it needs to.

A significant problem is that rate negotiations occur behind closed doors between the insurers and the Division of Insurance. In states such as Rhode Island and Oregon, there is an open and transparent process that allows advocates, expert actuaries, and others to examine why insurance costs are rising and if premium increases are justified.

Another challenge is that the rate review process in Massachusetts happens four times a year, which shortens the review period and makes it harder to have a transparent process that would allow for challenging rates if needed. Indeed, Kevin Beagan, the deputy commissioner of the Division of Insurance, said his agency did not challenge the increase or hold a hearing on it because that would have prevented the plans from being available in time for October’s open enrollment period on the Health Connector.

Last year, the Health Policy Commission reported that consumer premiums and out-of-pocket costs each increased by 5.6 percent, almost twice the overall health care cost benchmark for the state of 3.1 percent. Consumers are shouldering more than their share of the burden of health care cost increases. Every health care industry group – hospitals, providers, insurers, and pharmaceutical companies – needs to work together to bring down health care costs for consumers.

Meet the Author

Amy Rosenthal

Executive director, Health Care for All
Transparency is crucial in this effort. Health Care For All is calling for a more transparent insurance rate review process at the Division of Insurance so we can better understand what’s driving health care costs and if premium increases are justified. During this global pandemic, we need to take action now more than ever.

Amy Rosenthal is the executive director of Health Care For All.