Newsroom

April 5, 2010
Tufts Health Plan's Response to Division of Insurance Actions

Watertown, Mass. - Massachusetts' nonprofit health plans, including Tufts Health Plan, are in agreement that systemic change must occur to affect unsustainable health care costs, which are a burden to all business, but especially undermine small business.

The health plans have actively sought rate relief for small business through their advocating for the Affordable Health Plan, legislation that cuts premiums by 22 percent, caps provider payments at 110 percent of Medicare reimbursement levels and caps health plan margins at two percent. The Division of Insurance's action does nothing to address the underlying cause of premium increases, which is increase in medical care expenses. Health plans in the state, on average, spend 90 cents of every premium dollar on medical expense, which includes prescription drugs, medical devices and advances in technology, as well as physician and hospital payments. The state's health plans have experienced significant operating losses because of these escalating expenses.

Any efforts to reduce the burden of excessive health care costs to small business and others, must take a balanced approach, which is lacking with the implementation of the DOI's rulings. We are disappointed and concerned with the administration's actions. In response to these arbitrary rate caps, Tufts Health Plan has joined together with other nonprofit members of the Massachusetts Association of Health Plans, as well as Blue Cross Blue Shield, and have regretfully gone to court to seek a legal determination of the DOI's authority to cap rates. We remain committed to providing high quality coverage to our members and hope for a quick and fair resolution of this issue.

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