Wednesday, April 14, 2010

Judge denies insurers' request for injunction

Judge denies insurers' request for injunction

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Suffolk Superior Court Judge Stephen E. Neel today denied a request by six health insurers to allow them to implement double-digit premium rate increases for tens of thousands of small businesses and individuals.

Neel's decision not to grant an injunction sought by the insurers means the state Division of Insurance's rejection of 235 proposed rate hikes stands for now.

In making his much anticipated ruling, Neel accepted the argument of state government that the insurers should appeal the decision of Insurance Commissioner Joseph G. Murphy within the insurance division before they turn to the courts.

"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," the judge wrote.

The legal battle was touched off by the insurance division's recent decision to deny most proposed rate increases submitted by insurers for health plans covering individuals and small businesses.

In taking that action, the division was making good on a promise by Governor Deval Patrick to reject health insurance rate increases deemed excessive.

In response to the rejections, a half-dozen health insurers filed a lawsuit against the state seeking to reverse the decision by the insurance commissioner to block double-digit premium increases - a ruling they say could leave them with hundreds of millions in losses this year.

In a statement today, Patrick said: "I appreciate the court's decision. It's a welcome decision for small businesses and working families who need immediate relief from excessive and unreasonable increases in their health care costs."

An insurance industry spokesman said that he was still studying the decision and had no immediate comment.

Filing the suit were Blue Cross and Blue Shield of Massachusetts, the state's largest health insurer, and the five commercial members of the Massachusetts Association of Health Plans: Harvard Pilgrim Health Care, Tufts Health Plan, Fallon Community Health Plan, Health New England, and Neighborhood Health Plan. All are nonprofit carriers.

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