If you keep loosing money, why stay in business? Will the insurance companies be too big to fail?
Blue Cross Blue Shield is recording a loss of $65.2 million for the first quarter, following the Massachusetts Division of Insurance decision to reject proposed small business health care rates for 2010.
The health insurer’s loss for the same time period in 2009 was $36.6 million.
The health plan recorded the loss in the first quarter, per accounting rules. But the loss reflects what is anticipated for April, May and June, if Blue Cross does not succeed in appealing the DOI decision to reject its rates before then.
Gov. Deval Patrick instructed the DOI to reject any small business premium rate hikes that were “excessive.” The vast majority of plan rates for 2010 were rejected. The state’s major insurers have filed a lawsuit to
reinstate the proposed rates, and have also launched administrative appeals at the DOI.
The insurers claimed, in their lawsuit, that they would suffer hundreds of millions in losses if the proposed rates are not approved, and that it is the responsibility of the DOI to maintain the solvency of the health insurers.