Blue Cross Blue Shield of Massachusetts and the Massachusetts Association of Health Plans have sued the Massachusetts Division of Insurance (DOI) after the DOI’s decision last week to reject most proposed rate increases for small businesses for the current calendar quarter. The Massachusetts Association of Health Plans, which includes Harvard Pilgrim Health Plan, Fallon Community Health Plan, Tufts Health Plan, Neighborhood Health Plan, and Health New England, claimed that the DOI’s action could threaten their solvency and even the stability of health reform in Massachusetts. All of the insurers except Harvard Pilgrim lost money in 2009.
The lawsuit claims, among other things, that the DOI’s rejection of most of the proposed rate hikes is tantamount to a rate cap and that the DOI does not have the legal authority to cap rates. The complaint seeks a preliminary injunction to keep rates in place until the dispute is resolved, and a trial date of no later than June 15. The DOI has stated that the excess premiums would have to be refunded or credited to small businesses’ accounts.
