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Harvard Pilgrim cuts health premium rate increase

Ten days after state regulators approved Harvard Pilgrim Health Care’s request for a premium increase of 3.8 percent for the period starting April 1, the Wellesley-based insurer said yesterday it has effectively slashed its rate increase in half.

The new increase, OK’d by the state Division of Insurance, will be 1.9 percent for thousands of small businesses and individuals in the so-called small group market. About half of Harvard Pilgrim’s customers in that market are up for renewal April 1.

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Harvard Pilgrim chief executive Eric H. Schultz said the company, for the first time in memory, resubmitted its rate request after concluding new contracts with Beth Israel Deaconess Medical Center, a Harvard-affiliated Boston teaching hospital, and with Steward Health Care System, a Boston-based chain of Massachusetts community hospitals.

Schultz would not specify how much more the hospitals will be paid by Harvard Pilgrim, though he suggested the parties sought to keep medical costs down. “We worked very hard with both organizations, and with regulators, to bring some relief to small businesses and individuals in the marketplace,’’ Schultz said.

While regulators said earlier this month that premium increases for the upcoming renewal period were the most modest in years, Harvard Pilgrim’s initial increase was the highest among the state’s commercial health plans. Approved increases were 1.9 percent for Boston-based Blue Cross Blue Shield of Massachusetts, 1.2 percent for Tufts Health Plan of Watertown, and 2.7 percent for Worcester’s Fallon Community Health Plan.

Insurance division spokesman Jason Lefferts confirmed that state regulators had approved the smaller increase for Harvard Pilgrim. The new rate drops the overall average increase to 1.8 percent, from 2.3 percent, for the large renewal period, he said.

The increases cover only base rates - individual customers could pay more, or less, depending on the type of business, location, age of the workforce, and other factors.

Robert Weisman can be reached at
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