Are more health lawsuits on the way?

Nancy Marshall-Genzer Apr 7, 2010
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Are more health lawsuits on the way?

Nancy Marshall-Genzer Apr 7, 2010
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TEXT OF STORY

Bill Radke: In Massachusetts, six major health insurers want to raise premiums by as much as a third, and the state insurance commission has said “No.” So this week, they’re all headed to court. Now Massachusetts has already implemented its own health care overhaul. Which raises the question: are we going to see more of these lawsuits once the national health care changes take effect? Marketplace’s Nancy Marshall Genzer takes a look.


Nancy Marshall Genzer: The insurers are suing because they say Massachusetts is requiring them to sell their policies at a loss. The state says skyrocketing premiums are crippling small businesses.

Austin Frakt is a health economist at Boston University. He says the rate ruckus could go national when the health care overhaul is fully phased in.

Austin Frakt: Yeah, I think there’ll be lawsuits and threats and fights.

The Massachusetts insurers are arguing that penalties for not buying insurance are too low. Healthy people would rather pay a small fine than pony up for a policy. That leaves insurers, who must cover everyone, with too many sick people. And insurers say they must raise rates to cover them.

Amy Lischko teaches public health at Tufts University and helped implement the Massachusetts health care overhaul.

Amy Lischko: Nationally, there’s dramatic changes that are going to cause all sorts of shifts that insurers are just not going to be able to predict accurately. And so they’re going to probably increase their rates just because of the unknown.

Premium hikes could slow down under health care reform because it requires that 80 to 85 cents of every premium dollar go toward patient care. But Lishko says the best way to avoid high premiums and lawsuits is to cut the cost of care. Massachusetts didn’t do that.

Lishko: And I think the national plan went the same route — let’s cover everyone first and then we’ll look at how we can constrain health care costs. ow whether you can afford to do that on a national basis is another question.

A question that may be answered in the courtroom.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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