{"id":7690,"date":"2025-06-23T09:55:08","date_gmt":"2025-06-23T09:55:08","guid":{"rendered":"https:\/\/www.europesays.com\/us\/7690\/"},"modified":"2025-06-23T09:55:08","modified_gmt":"2025-06-23T09:55:08","slug":"health-insurance-13-4-rate-hike-is-unaffordable","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/7690\/","title":{"rendered":"Health insurance 13.4% rate hike is unaffordable"},"content":{"rendered":"

Do you think you are paying too much for health insurance? Just wait. Eight commercial health insurers, who sell insurance to Massachusetts individuals and small businesses in the \u201cmerged market,\u201d submitted their proposed rates for 2026 that call for an average rate increase of a whopping 13.4 percent<\/a>, according to the Division of Insurance.<\/p>\n

In comparison, in 2024 and 2025,<\/a> insurers in that segment of the market proposed rate increases of 5.3 percent and 8.4 percent. State regulators ended up approving slightly lower increases.<\/p>\n

The merged market represents only one segment of Massachusetts\u2019s insurance market, with around 721,400 people enrolled. It doesn\u2019t include government-run Medicare and Medicaid or plans sold to larger companies, many of which self-insure. But the merged market offers a snapshot of the enormous growth in health care spending \u2014 and the pressure placed on consumers who must pay for insurance.<\/p>\n

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High prices affect people like Dayanne Leal, who has worked in the health care industry and who testified at a public Division of Insurance hearing Tuesday. Leal was laid off from her job in April and hopes to start her own business but said her biggest concern is whether she can afford health insurance that\u2019s not employer-based. The plans she found had monthly premiums of $600 to $700 for an individual. \u201cHealth insurance shouldn\u2019t be the reason people abandon their dreams to start a new business,\u201d Leal said.<\/p>\n

In March, Governor Maura Healey\u2019s administration issued guidance<\/a> directing insurers to limit the growth of deductibles and copays to the rate of medical inflation (around 4.8 percent) \u2014 and insurers warned at the time<\/a> that limits to cost sharing would force insurers to raise premiums, as they have now proposed.<\/p>\n

The Division of Insurance has the authority to approve or reject proposed health insurance rate increases. In 2010, Governor Deval Patrick encouraged state insurance regulators<\/a> to reject nearly 90 percent of insurer rate requests, including every double-digit rate increase. The request was unprecedented at the time, but now Healey is widely thought to be contemplating a similar move.<\/p>\n

Rejecting the insurance rates would likely trigger appeals and negotiations before new rates are finalized. After some legal wrangling, almost all the insurers ultimately reached settlements with the Patrick administration allowing them to raise rates by smaller amounts.<\/p>\n

Rejecting rates again would send a powerful message to insurers about the importance of keeping health care affordable and trimming unnecessary administrative spending. It would potentially give insurers leverage to renegotiate lower prices with health care providers. That\u2019s a good thing.<\/p>\n

But, as insurers rightly point out, rejecting rates won\u2019t solve the problem of climbing health care costs. After all, if spending on health care rises, someone has to pay, and squeezing insurers won\u2019t solve the problem. According to the Massachusetts Association of Health Plans, the median total margin for state health plans was negative 1.06 percent in 2024, which means a majority of health plans lost money. Blue Cross Blue Shield of Massachusetts testified at the insurance hearing that the company lost $400 million last year, its biggest ever operating loss.<\/p>\n

The main drivers of the proposed rate increases are medical and pharmacy claims, with medical claims expected to increase by 8.4 percent next year and pharmacy claims by 16.2 percent. <\/p>\n

In written testimony<\/a> filed with the Division of Insurance, multiple insurers said inflation along with labor shortages have led to health care providers requesting higher reimbursement rates. Lora Pellegrini, president of the Massachusetts Association of Health Plans, said at the hearing that hospitals have been asking for rate increases of 20 to 40 percent.<\/p>\n

On the pharmacy side, the insurers said more patients are using expensive brand-name and specialty drugs. (This includes GLP-1 drugs, although many plans intend to limit coverage of these medications for obesity \u2014 while maintaining coverage to treat diabetes \u2014 because of the high cost.) <\/p>\n

There\u2019s no easy answer on how to lower health care costs. Ideas that have been floated by various groups in the health care industry include capping prices for high-cost drugs; capping prices for the most expensive hospital systems; offering consumers less expensive insurance plans with limited provider networks; eliminating \u201cfacility fees,\u201d where the same procedure costs more in a hospital than a doctor\u2019s office; reducing government mandates to cover various treatments that can drive up costs; and simplifying insurers\u2019 prior authorization processes, among others.<\/p>\n

The Legislature should consider any and all ideas and move forward with the ones that make the most sense. The high cost of the health care system today is unsustainable.<\/p>\n

Editorials represent the views of the Boston Globe Editorial Board. Follow us @GlobeOpinion<\/a>.\n<\/p>\n