Heads of nine large business groups this month called on the Legislature to override the vetoes, claiming the legislative initiatives tucked into the budget will provide stability and certainty for employers in the area of health plan rates.
By MICHAEL NORTON
BOSTON - Just as Massachusetts House members were settling in Wednesday afternoon for a session that could feature veto overrides, the state's top consumer affairs official cautioned lawmakers against overriding Gov. Deval L. Patrick's vetoes of two fiscal 2012 budget sections, saying the move "would undermine the state's ability to control health care costs."
The heads of nine large business groups this month called on the Legislature to override the vetoes, claiming the legislative initiatives tucked into the budget will provide stability and certainty for employers in the area of health plan rates.
The first section, according to the business groups, would retain current standards for rate approvals, including medical loss ratios, limits on health plan profits and rates of increase for administrative expenses. It also requires the Division of Insurance "to utilize sound actuarial principles in disapproving rates," according to the groups, which include the Associated Industries of Massachusetts, the Massachusetts Taxpayers Foundation and Blue Cross Blue Shield of Massachusetts.
Barbara AnthonyThe second section that Patrick vetoed would require the division to notify a health plan 60 days before the effective date of proposed rates if it intends to disapprove the rates, rather than the current 45 days. Failing to notify a health plan within 60 days of disapproved rates would result in rates being deemed approved under the budget directive.
In his veto message, Patrick said the 60-day section "inhibits the commissioner from conducting a thorough review of the carrier's rate submission, and automatically allowing rates that have not been thoroughly reviewed could increase premium costs and create confusion in the marketplace." He said the rate approval standards section would "decrease efficiency and transparency" in the division's rate hearings.
In a statement issued just before the House was set to gavel in for a session that could include veto overrides, Undersecretary of the Office of Consumer Affairs and Business Regulation Barbara Anthony recommended that the Legislature let Patrick's vetoes stand.
“Overriding the Governor’s vetoes of these sections would undermine the state’s ability to control health care costs," Anthony said. "It would also reduce efficiency and transparency in the process of reviewing rates, particularly the appellate review of disapproved rates. This veto creates a review period for the Division of Insurance that will make it more difficult to do the necessary thorough review of rate filings. This is not in the best interests of Massachusetts consumers. At a time when health care costs must come down, this override creates impediments to rate examination that may lead to increased costs for small businesses and working families.”
Other groups that signed a July 13 letter to legislative leaders urging overrides were the Affiliated Chambers of Commerce of Greater Springfield, the Worcester Regional Chamber of Commerce, the Massachusetts Business Association, the Massachusetts High Technology Council, the Massachusetts Association of Health Plans and the Massachusetts Association of Health Underwriters.
Patrick and state Division of Insurance officials have taken a hard line against health insurance rate hikes they have deemed excessive, stirring frequent battles with insurers during his tenure over the appropriateness of rates.
Override efforts, if undertaken, are initiated in the House and require two thirds approval in both branches.