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Massachusetts Insurance Wars: The Battle Over Rate Hikes

Massachusetts Insurance Wars: The Battle Over Rate Hikes

You remember that controversy earlier this year over Anthem Blue Cross's insurance rate hikes?

Well, Massachusetts is experiencing another controversy related with rate hikes. A state commissioner rejected 235 of 274 rate hikes proposed by six nonprofit insurance carriers. It's the first time the state has denied rate increases under emergency regulations, according to The Boston Globe.

The state's action has prompted those insurers to sue and get a preliminary injunction preventing the rate increase denial.

"As a result of the commissioner's action," attorney Dean Richlin told The Globe, "the insurance companies will experience substantial and, in some cases, staggering losses. We estimate the collective loss among all of the insurers will run into the hundreds of millions of dollars just for 2010. There are some number that will face near-term solvency problems."

The comments in response to the story looked like a replay of the Obama health care reform debate.

Some readers had little sympathy for the nonprofit insurers, citing stories-rightly or wrongly-about exorbitant executive compensation and the spiraling cost of medicines. Others said the insurers were only trying to recover their costs and warned that this could lead to a government takeover of health care.

What do you think? Should Massachusetts allow the nonprofit insurers to increase their rates? Should the state even have these regulatory powers? If the state prevails, what do you think will happen to the insurers? What might that mean to insurers nationwide? How many times do you think we will see this kind of legal battle repeated nationwide?

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