A Massachusetts Division of Insurance appeals board has agreed with Harvard Pilgrim that the premium rate increases it sought earlier this year were in line with increases in provider costs.
According to the Boston Globe, in reversing the insurance division's earlier ruling, its appeals panel found that the higher rates Harvard Pilgrim sought for plans covering individuals and small businesses were in line with what it must pay to the hospitals and doctors who provide medical care.
In the short run, that is good news for Harvard Pilgrim and possibly the state's other health plans whose appeals are still pending. It means that they can keep their doors open a bit longer. However, it does nothing to lower heath care costs. And, consumers will be left paying the bill.
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Lora Pellegrini, president of the Massachusetts Association of Health Plans, a trade group based in Boston, told the Globe that the decision proves that the health plans were right all along. She went on to say that the state should pass legislation to limit the ability of health care providers to charge ever-escalating prices.
Let the Whack-A-Mole game begin!
Price controls have never proven to be an effective means of reducing costs. What they are good at doing is limiting access and lowering quality. Maybe it is time to put the consumer in charge.
The 2010 AHIP Census of HSA/High-Deductible Health Plans shows that Massachusetts has been fairly slow to adopt these types of consumer-driven health plans that are proving effective in controlling costs. According to the 2010AHIP Census, HSA-qualified plans in Massachusetts had only 93,231 members representing 1.9 percent of the covered population. The average HSA-qualified plan cost $381 a month for single coverage and $1,002 for a family.
Now compare that to Florida where 638,717 or 5.7 percent of the covered population are enrolled in an HSA plan. The cost of a month of single HSA coverage in the Sunshine State averaged $311 and families pay $787 a month. That is a 20 percent saving in premium costs.
There are probably a myriad of reasons one could come up with to show why Florida's HSA-premium rates, and presumably the underlying medical costs, are lower than Massachusetts, but I have to think that 600,000 Floridians who now have a real interest in what their providers are charging is a factor.
The choice is not just between raising premium rates and capping provider pricing. The third way is to allow those who actually pay the bill to finally enter into the negotiation process and influence the market by rewarding providers who provide value.
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