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Globe Editorial

Health insurers: Capping unnecessary perks

April 15, 2011

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Attorney General Martha Coakley yesterday blasted the state’s nonprofit health insurers for paying their boards of directors. Her inquiry into the tens of thousands of dollars that two insurers pay their directors rightly found that the practice “fails to meet the standard of good governance’’ expected of a public charity. The Legislature should give her the authority she seeks to prohibit the payments.

Even before Coakley’s office began investigating earlier this year, Blue Cross and Fallon Community Health Plan announced they were suspending payments to their board members, but last month Harvard Pilgrim Health Care and Tufts Health Plan said they would continue the stipends. They range up to $68,100 at Harvard Pilgrim and $82,500 at Tufts.

Tufts and Harvard Pilgrim say they need the financial inducements to get top-quality board members with special expertise. That claim would ring less hollow if the state’s nonprofit hospitals, including some of the premier teaching hospitals in the country, did not manage to attract highly competent board members without compensating them.

The crisis of rising costs in health care will not be solved if major players like the insurers continue handing out dubious perks.