No end yet to insurance standoff

Hundreds still unable to buy from state site

By Robert Weisman
Globe Staff / April 10, 2010

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Hundreds of individuals and owners of small businesses seeking to buy health insurance this week were turned away from the state’s Health Connector website as the standoff between insurers and Massachusetts regulators dragged into the weekend.

Insurers yesterday said they were looking to Suffolk Superior Court Judge Stephen E. Neel for guidance on how, or whether, to comply with a state directive to prepare new quotes — and post them on the Commonwealth Health Insurance Connector Authority’s site — using 2009 base figures rather than proposed higher rates that were rejected by state regulators last week. The rates in question apply to the small group market, a pool that includes individuals and small businesses.

Neel is expected to rule Monday on the insurers’ request for an injunction that would allow them to go ahead with implementing double-digit increases that were denied last week by the state Division of Insurance. Six state insurers filed suit against Insurance Commissioner Joseph G. Murphy, asserting the rejections were arbitrary and exceeded the state’s authority to review rates. The case has been closely watched as a test of how state governments and courts will address rising health care costs.

While insurers were told to have their revised rates ready by yesterday, Connector spokesman Dick Powers said none submitted updated rates by the end of the day. Because it takes time for the Connector to load and test new rates on its software, he said, they aren’t likely to be available until the middle of next week at the earliest. The Connector was created by the state’s 2006 health care law to help people obtain coverage.

Jamaica Plain software engineer David Heimann, who is out of work, was unable to purchase health insurance on the Connector site this week because state regulators ordered insurers to remove the rejected rates, which the companies had already posted. Heimann said he also couldn’t buy a policy from individual carriers yesterday.

“I just got caught up in this,’’ he said.

Powers said more than 300 would-be customers had left messages on the agency’s website as of late afternoon yesterday asking to be notified when new rates are posted. He said there was no way to determine how many others visited the site to buy insurance, but gave up without leaving their e-mail addresses.

About 50,000 policies covering 200,000 members in the small group market — about a quarter of the entire market — were up for renewal April 1. The Connector typically handles about 2,400 renewals and enrollments each month.

Jay McQuaide, vice president at Blue Cross and Blue Shield of Massachusetts, the state’s largest health insurance company, said insurers were confused about conflicting statements made during a Thursday hearing before Judge Neel about what date to use in recalculating rates. “We’re looking to the judge for some clear direction and guidance on what the next steps are,’’ McQuaide said.

Fallon Community Health Plan spokeswoman Christine Cassidy said, “At this point we’re awaiting guidance from the court.’’

Barbara Anthony, undersecretary of the state Office of Consumer Affairs and Business Regulation, said state officials have made it clear that insurers must immediately begin quoting rates — or give their best estimates, if they haven’t finished their calculations — so people and businesses can sign up or modify their coverage.

“We expect the carriers are going to supply consumers with accurate information about their prices, and that the prices are going to be based on April 2009 rates,’’ Anthony said.

“Carriers have a legal obligation to sell insurance, and no individual or small business should be denied coverage,’’ she said. “If we get complaints from consumers who are trying to buy insurance and they’ve been denied, we’ll investigate and take appropriate action.’’

As they await Monday’s ruling from Neel, three health insurers yesterday said they also plan to file administrative appeals with the insurance division next week to contest the state rate rulings on two separate tracks. Blue Cross and Blue Shield, Fallon, and Tufts Health Plan will join a fourth insurer, Harvard Pilgrim Health Plan, which already filed an appeal.

State Assistant Attorney General David A. Guberman argued in court Thursday that insurers should be required to exhaust the appeals process within the insurance division before turning to the courts.

Robert Weisman can be reached at