Health costs in the state continue to skyrocket, causing the Group Insurance Commission (GIC) to drop the Tufts and Harvard Pilgrim insurance plans. The GIC provides coverage to 440,000 state and town employees & retirees). This is a serious loss for employees, and also for the insurance companies that lost the GIC business.
Everything is being squeezed out by high inflation in health costs. Insurance companies have to raise rates, but the GIC can’t cover the full rate increases.
The writing was on the wall already last year – if I remember right, last year the GIC had already closed a bunch of popular but expensive insurance plans from new members.
The state legislature now plans to have public hearings about this crisis, but, IMHO, they should have legislated some form of equalization of price disparities at least one or two years ago. The reason why price equalization was not pushed more forcefully by the state legislature, again IMHO, was to protect hospitals and pharma, which are a big segment of the state economy.
The SEIU had been organizing a 2016 ballot question that would have addressed big disparities in payments by insurance companies to individual Massachusetts hospitals. This would have cost $440M yearly to Partners alone – the state’s largest health care provider, Partners. In May 2016, however, the SEIU made a deal with hospital industry executives and Beacon Hill leaders to drop the ballot question – with promises that Beacon Hill will address the problem by legislation in the next 5 years – and with an agreement with the Partners hospital network whereby more workers at Partners hospitals would unionize under the SEIU.