News & Events

Health care cost is back on table

Campaigns tackle rate-cap reversal

By Brian C. Mooney, Globe Staff  |  June 28, 2010

The politics of high health care costs is again roiling this year’s governor’s race after an appeals panel on Thursday rejected the Patrick administration’s cap on premium increases sought by Harvard Pilgrim Health Care for some of its customers.

The issue poses a blend of political risks and opportunities for the two leading candidates at this point, Democratic Governor Deval Patrick and Republican challenger Charles D. Baker, the former chief executive of Harvard Pilgrim.

The Patrick campaign is betting that even with last week’s setback, the governor’s attempt to limit insurance rate hikes is good policy and good politics. There is risk for the first-term incumbent, however, if voters perceive his efforts as election-year grandstanding. That’s what Baker and the other major challenger, state Treasurer Timothy P. Cahill, an independent, have repeatedly charged.

At the same time, Patrick and Cahill have sought to make Baker’s 10-year tenure at Harvard Pilgrim a liability, accusing him, most recently during a radio debate on WRKO, of failing to hold insurance rates down. When Baker left the insurance company about a year ago, his expertise in the field and leadership role in bringing it out of receivership were widely viewed as an asset. The frequent criticism by his opponents, however, has often put him on the defensive in the campaign.

Health insurance costs are almost guaranteed to be in the news for some time. Three other insurers have also challenged the state’s rejection of their proposed premium increases. Also, the Legislature may enact a law designed to curb rising health costs for small businesses and others before the legislative session ends next month.

The Senate last month passed a bill that would require wealthier hospitals to pay $100 million into a fund to provide premium relief for smaller businesses, which would be permitted to join cooperatives to buy insurance at a lower cost.

Another version, pending in the House, is based on a measure filed by Patrick in February. It would tie state approval of insurer rates and their contracts with hospitals and doctors to the Consumer Price Index for medical services.

On Thursday, a three-member panel of lawyers in the state Division of Insurance found that the rate increases sought by Harvard Pilgrim in April, averaging roughly 8 to 12 percent, were reasonable based on what the state’s second-largest insurer pays hospitals and physicians. The decision overruled the administrative decision of the state insurance division, which rejected the premium increases for policies of small businesses and individual customers.

Blue Cross Blue Shield of Massachusetts, Tufts Health Plan, and Fallon Community Health Plan are also appealing the insurance division’s rejection in April of double-digit rate increases.

In a secondary skirmish yesterday, House Minority Leader Bradley H. Jones Jr., a Baker ally, called on Patrick to release any documents or correspondence used in the decision to cap health insurance rates, repeating a request he made in a June 10 letter to which he said Patrick had not responded.

Hours later, Patrick released a three-page letter in response, directing Jones to four separate public reports of state agencies and a commission that have studied the rise in health care costs. Patrick also noted that he has filed related legislation, and that Jones had “yet to express support for these measures.’’ He then asked for Jones’s help in passing the legislation before the end of the session. Jones said later that Patrick has never spoken to him about the bill, but that he would “keep an open mind’’ if it emerges from the House Ways and Means Committee.

In response to the decision in the Harvard Pilgrim case, the campaigns continued to hammer away along familiar themes.

“Deval Patrick has done nothing over the last four years to control health care costs, and [Thursday’s] ruling exposes this latest proposal for what it is: a political stunt,’’ Baker said in an e-mail reply to a request for comment. “It’s time we get serious about fixing the problems Massachusetts faces and stop playing political games in an election year.’’

The governor’s reelection campaign returned the shot.

“It is not at all surprising that [former] health insurance CEO Charles Baker opposed Governor Patrick’s effort to provide emergency relief for small businesses and working families struggling under the weight of soaring health insurance premiums from the outset,’’ Alex Goldstein, Patrick’s campaign spokesman, said in an e-mailed statement.

“Republican Charles Baker appears more interested in sticking up for his friends in the health insurance industry.’’

Cahill, in a telephone interview, said: “I’m not surprised, because I thought the decision by Patrick was totally arbitrary and political and the wrong way to get costs down for businesses and whatever he’s trying to do. There was no history; he hadn’t done it in four years.’’

On the impact of the issue in the campaign, Cahill, referring to Patrick and Baker, said: “I don’t think it’s good for either of them, to be honest with you.’’

Brian Mooney can be reached at