Obamacare: Massachusetts Storm Warning

Tuesday, May 25, 2010
Wesley J. Smith

Massachusetts’ experiment with a form of Obamacare is failing, with the state’s insurance companies in terrible financial trouble because of the heavy hand of politicized premium regulation. From the story:

The four major Massachusetts health insurers yesterday posted first-quarter losses totaling more than $150 million, with three of them blaming the bulk of the losses on the Patrick administration’s decision to cap rate increases for individuals and small businesses.The carriers attributed $116 million of their $152 million in losses to the April 1 ruling by the state Division of Insurance to deny most proposed premium increases for the so-called small-group market. That category covers 800,000 residents who are self-insured or employed by companies with 50 or fewer employees.

Yesterday’s financial reports renewed the dispute between state officials, who say they are protecting consumers from excessive rate hikes, and the health insurance industry, which complains it is being unfairly blamed for surging medical costs and being forced to sell policies at rates that cause them to lose money. “The health plans are not collecting enough premiums to cover their costs,’’ said Lora Pellegrini, president and chief executive of the Massachusetts Association of Health Plans. “These results support what we’ve said: that the plans would lose millions of dollars from this scheme and it would do nothing to control underlying health care costs.’’ the rest