Massachusetts health insurers are in court today, seeking relief from the state's rejections of their rate increases last week.
The state's insurance commissioner blocked 235 of 274 increases ranging from 8 to 32 percent on policies for small businesses and individuals. Those hikes would have taken effect April.
The insurers say increased costs of care are the problem and lay the blame for the hikes on higher charges by hospitals and doctors. They want a state judge to quash the insurance commissioner's actions.
In reaction to the commissioner's decisions, most of them said earlier this week they would stop offering new policies at the old rates, as the Boston Globe reported.
The state didn't take too kindly to that and told the companies they better be offering policies again through the state's marketplace by the end of the week. On Wednesday, two companies agreed to do that.
A vice president for Blue Cross Blue Shield Massachusetts, the largest health insurer in the state,told WBUR that insurers don't argue that double-digit annual rate hikes are acceptable. "But we also feel that arbitrary caps on premiums is simply not a meaningful or sustainable solution, and that's why we have taken this legal action," the executive said.
The companies are in a "real bind," Stuart Altman, a professor of health policy at Brandeis University told WBUR. Ultimately, the issue is not what the insurance companies can charge but what the cost of health care really is."
Last month Massachusetts Attorney General Martha Coakley (remember her?) issued a long report after analyzing health costs in the state. A couple of points play well for the insurers. More expensive hospitals "are gaining market share at the expense of lower priced hospitals, which are losing volume," the report notes.
And the AG notes, an increase in prices for care — not people using more medical resources — is the big driver of the rise in state health costs in recent years.