AIM Mulling Remedies Following Rating Factor Decision
The Associated Industries of Massachusetts (AIM) late last week said it was “gravely disappointed” with U.S. Secretary of Health and Human Services Kathleen Sebelius’s denial of Gov. Deval Patrick’s request for a waiver on health insurance rating-factor limitations under federal health care reform.
AIM, which lobbied for the waiver to allow insurance companies to consider additional factors in deciding policy rates on top of the four factors allowed by the Affordable Care Act, said in a blog post it will now consider remedies to help keep health insurance costs down for Massachusetts employers. That includes legal action and supporting legislation to de-merge the Massachusetts health insurance market for individuals and small business companies to lower costs, after the market was merged in 2006 under state health care reform.
“Denial of the waiver will cause health insurance costs to rise significantly for many small employers and their employees in the merged market, for no good reason. Why disrupt a system that works here in Massachusetts where 97 percent of people have health insurance?” said John Regan, executive vice president of government affairs at AIM.
Massachusetts law currently allows health insurance companies to consider industry, participation rate, group size, intermediary discount and group-purchasing cooperatives when setting rates for companies with 50 or fewer employees. But given Sebelius’s decision, Massachusetts will be subject to the four federal rating factors, including age, family size, geographic area and tobacco use, by 2016.
“As a result of your leadership and dedication to this issue, we continue to explore any possible option regarding your request; however, we are unable to grant a permanent waiver from these rating rules," Sebelius wrote to Patrick, following his request on Sept. 3. "For policy years beginning on or after January 1, 2016, issuers must be in full compliance with the rating rules under section 2701 of the Public Health Service Act.”
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