Consumer groups plan rally today

By Chelsea Conaboy for

June 30, 2011

As lawmakers and industry leaders toil over plans to fundamentally change how health care is paid for in Massachusetts, two leading consumer groups are asking them to give ratepayers a one-year reprieve from premium increases.

At a noontime rally at the State House today, Health Care for All and the Greater Boston Interfaith Organization plan to call for a 2012 freeze on base premium rates that have jumped sharply in the past decade. The idea is to pressure decision makers, particularly insurers and hospitals, to hash out a long-term plan at a quicker pace.

The Rev. Hurmon Hamilton, president of the interfaith group, said he expects industry leaders to say a freeze is impossible.

“With the same urgency, consumers are saying, ‘We can’t continue to absorb anymore of these increases,’ ’’ he said.

From 2007 to 2009, premiums for private group plans in Massachusetts increased 5 to 10 percent annually, while benefits were reduced, according to a state report. Last year, state regulators fought off proposed increases in the teens and higher for small businesses and individuals.

The state Division of Insurance has no authority to enact a cap on rates. That means a freeze would require cooperation from insurers and physicians.

While it has happened before, it seems unlikely based on reaction yesterday from industry leaders who said a cap on rates would create a bureaucratic quagmire.

In 1993, major manufacturers, retailers, and other employers joined with the Group Insurance Commission, which covers state employees, to present their demands to insurers and state regulators.

In 1994, the group requested and received level premiums. In 1995, it requested a decrease. At the time, industry officials said it was a reasonable goal.

“Purchasers are exerting a lot of influence, and that is the way it should be,’’ a spokesman for Harvard Community Health Plan told the Globe at that time.

Lynn Nicholas, president of the Massachusetts Hospital Association, said yesterday that hospitals are already working to reduce unnecessary medical care and create new incentives for care that is high quality and low cost.

Variations in the prices charged by hospitals and physicians are a primary driver of premium increases. Keeping rates level would require many hospitals to reopen contracts with insurers and agree to reduce those prices.

“This is really an overly simplistic, micromanagement approach,’’ Nicholas said of the proposed freeze. “What these organizations don’t understand is the complexity around contracting.’’

Partners HealthCare, whose hospitals are among the most expensive in the state, is in talks with major insurers about reopening their contracts, said spokesman Rich Copp.

Renegotiated contracts would help reduce health costs, said Lora Pellegrini, president of the Massachusetts Association of Health Plans.

She said she thinks the consumer groups would have been more effective if their campaign focused on contracts rather than premiums.

A freeze could require some insurers to dip into reserves, said John McDonough, a professor of public health practice at the Harvard School of Public Health and former executive director of Health Care for All.

“What’s a better use of those reserves than to send a signal to everybody that things have to change?’’ he said.

The campaign includes efforts to get consumers to do more themselves to curb medical costs. Over the next several months, the Greater Boston Interfaith Organization plans to roll out programs in its members’ mosques, synagogues, and churches to teach health literacy, encourage exercise, and promote end-of-life planning, among other things.

Hamilton said that the nation is watching to see whether Massachusetts can get health costs under control and that the national health care law, built on the state’s model, will be judged based on the state’s success.

“We’ve got to get it right now,’’ he said. “We don’t have the luxury of more time.’’

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