Proposed Health Care Bill in Massachusetts Would Regulate Price Increases - Not Prices

The Massachusetts governor filed a wide-ranging bill  last week which would further regulate the small group and individual insurance market in the state, while encouraging selective networks and reducing state mandates. Health care provisions represent 6 1/2 pages of the bill, which is entitled  “An Act Providing for Job Creation by Small Businesses.”

The proposed legislation doesn’t regulate prices – it regulates price increases by both health plans and providers.  Therefore, this bill would likely prolong the current situation, where different provider networks are paid vastly different sums for the same care.  The bill will not address the problems outlined in the Attorney General’s report on pricing in the commonwealth.  

One interesting provision would mandate that small group plans offer narrow network plans with lower premiums.  This could substantially increase competition, since health plans currently lack leverage to press for lower prices as long as every health plan must include all providers. However, the bill only requires these narrow networks for individual and small business accounts, although they could be made available to other health plan clients.

The bill also extends a moratorium on new mandates and gives plans for individuals and small businesses a very narrow window to ignore current state mandates. 

Overall – this bill might give the state a bully pulpit to discourage increased prices from providers and health plans.  It will not address large price disparities, and is not likely to substantially lower overall health care costs.  The state legislature is generally unlikely to pass the health care elements of this proposed bill without substantial revisions.