The Wall Street Journal’s editorial page on April 9 noted that price controls imposed by Governor Deval Patrick halted the sale of health insurance to small businesses and individuals last week. It was noted:
The Massachusetts small-group market that serves about 800,000 residents shut down after Mr. Patrick kicked off his re-election campaign by presumptively rejecting about 90% of the premium increases the state's insurers had asked regulators to approve. Health costs have run off the rails since former GOP Governor Mitt Romney and Beacon Hill passed universal coverage in 2006, and Mr. Patrick now claims price controls are the sensible response to this ostensibly industry greed. Yet all of the major Massachusetts insurers are nonprofits…
A court decision is expected by Monday, but state officials have demanded that the insurers—under the threat of fines and other regulatory punishments—resume offering quotes by today and to revert to year-old base premiums. Let that one sink in: Mr. Patrick has made the health insurance business so painful the government actually has to order private companies to sell their products (albeit at sub-market costs).
So what happened with that court decision? The Boston Herald reported:
A Suffolk Superior Court judge ruled in favor of state regulators yesterday in a high-stakes dispute with health insurers over the cost of health care for small businesses and individuals in Massachusetts. Judge Stephen E. Neel said the six health insurers that took the state to court must use the state’s appeals process to resolve their dispute. “Because plaintiffs have not exhausted their administrative remedies, and because they have not demonstrated that they are otherwise entitled to injunctive relief, their motion for preliminary injunction will be denied,” Neel wrote in his decision.
And the Governor’s response? He “applauded the ruling, calling it ‘a welcome decision for small businesses and working families who need immediate relief from excessive and unreasonable increases in their health-care costs.’”
Well, that is, if small businesses and working families can find someone to sell them a policy. And given the government mandates and regulations that jack up costs, how long any private entities will be able to sell policies remains in doubt. The insurers pledge to fight on against the price controls.
By the way, take note. This is what ObamaCare will impose nationally.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
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