Patrick administration, Harvard Pilgrim Health Care reach settlement in premium increase flap

Mass., Harvard Pilgrim reach premium increase deal

BOSTON — The Patrick administration announced Friday that it has reached a settlement with Harvard Pilgrim Health Care amid an ongoing dispute about small-business health insurance premiums.

The state Division of Insurance had rejected 25 of 26 increases Harvard Pilgrim proposed April 1, along with a series of increases proposed by other leading insurers.

Gov. Deval Patrick has argued skyrocketing premium rates are discouraging small businessmen from hiring new workers. The insurers say their costs are triggered by rapidly rising charges from providers such as doctors and hospitals.

Harvard Pilgrim initially sued to get its increases. It lost in court but last week won an appeal to an Insurance Division panel. Simultaneously, it continued negotiations with the administration on a permanent resolution.

The settlement includes no retroactive increases, and base-rate increases are lowered by as much as 15 percent, compared with the originally proposed rates.

“We’re going to continue to use the leverage we have, because working families and small businesses need a break,” the governor told reporters.

Lora Pellegrini, president of the Massachusetts Association of Health Plans, an umbrella group for the insurers, said Patrick also needs to pay the same attention to providers.

“What the Patrick administration has engaged in is a failed policy,” she said. “It doesn’t go after the underlying cost drivers.”

The insurers suggest they are being singled out as Patrick seeks to score political points against insurers amid his re-election campaign. One of his main rivals is Republican Charles Baker, who headed Harvard Pilgrim before resigning to run for governor this fall.

Pellegrini said the governor is targeting insurers “rather than do the hard work, which is go after the providers.”