Health insurance premiums are going down --at least for my Massachusetts business

Every July my business partners and I brace ourselves for a big premium increase from Blue Cross Blue Shield of Massachusetts. Since we started our consulting firm close to 10 years ago premiums have roughly doubled. Our current family premium is over $20,000 for an HMO with fairly high co-pays. So I was more than pleasantly surprised when I opened up the renewal proposal for the fiscal year starting in September and discovered that Blue Cross plans to reduce our rates for the first time ever. Granted, the decrease is only 0.2 percent, but it’s still excellent news. Massachusetts has a community rating system, where our premiums are based just on our geographic region, age of our members, and our industry. Our members have all aged by a year so unless the Boston area or people in the management consulting industry got healthier it looks like Blue Cross has been doing a good job of managing costs. Two months ago I interviewed BCBS of MA CEO Andrew Dreyfus and he commented on his expectations for fairly flat premiums. Basically, BCBS has taken a hard line on hospital and physician fee increases while introducing an innovative Alternative Quality Contract that provides incentives to curb excessive care and improve quality. I’m cautiously optimistic that we are going to see a few years of premium stability in Massachusetts as providers redesign the provision of care, payers scrutinize contracts and introduce more limited network products, business owners pay more attention to what they’re buying, and consumers learn how to navigate the system more effectively. Critics of Massachusetts health care reform (mostly from out of state) cite the failure to control cost as one of the major shortcomings. My responses has always been that the idea was to get everyone into coverage first, and then turn toward cost containment as a way to preserve universal coverage. Six years or so after the passage of health reform, we may be turning the corner on costs in Massachusetts. I hope critics of Massachusetts health reform, and its offspring the Affordable Care Act, will reconsider their opposition if the cost trend in the Bay State continues to flatten.