Double-Digit Premium Increases Loom for Massachusetts Residents

Nearly 700,000 residents in Massachusetts are facing the possibility of steep premium hikes next year as insurance companies deal with rising costs in the health care sector, which could worsen affordability issues for patients.

Insurers in the merged market, which includes many individuals and small businesses, are proposing an average premium increase of 12.9% for 2027, according to an announcement from the Insurance Bureau. This follows their request for a 13.4% increase last year.

John Hurst, president of the Massachusetts Retailers Association, expressed his deep concerns, stating that these increases are “absolutely unaffordable,” comparing them to benchmarks that are four times higher than expected and significantly above inflation rates. He voiced frustration over the perceived neglect from both the health care industry and elected officials regarding the impact on small businesses, which are reportedly experiencing even larger hikes than their bigger counterparts.

Last week, Governor Maura Healey instructed insurers in the merged market to limit cost-sharing increases to 3.6%. Her office claims this move could save residents over $230 annually as they grapple with mounting medical bills and debts. Meanwhile, Insurance Commissioner Michael Caljou remarked that coverage is becoming “increasingly unaffordable and unsustainable.”

Lora Pellegrini, CEO of the Massachusetts Association of Health Plans, mentioned that the 2027 proposal reflects the continuous rise in health care costs across the state, particularly in outpatient care, physician services, and prescription drugs. Pellegrini anticipates recommendations from the Governor’s Affordable Care Working Group in June aimed at addressing the fundamental cost issues in the market.

Blue Cross Blue Shield of Massachusetts, the state’s largest insurer with about 166,384 members, is planning an average premium increase of 15.3%. Tufts Health Public Plans follows closely, aiming for an 11.8% raise for its 160,566 members.

The most significant proposed increase comes from Fallon Regional Health Plan, which has suggested a 25.7% hike for its 29,641 members. In contrast, Harvard Pilgrim Health Care plans a more modest increase of 6.7% for its 79,318 members.

In its filings, Blue Cross Blue Shield highlighted that medical and drug costs for its members are on the rise, noting trends that reflect the fastest expense growth in over ten years. They cited various pressures including increased use of outpatient surgeries, behavioral health services, and high-cost specialty drugs.

Fallon Health also pointed to rising costs driven by adjustments in risk and claims, noting that changes in federal and state policies, particularly the end of premium subsidies, contribute to this situation. They are trying to manage costs through tighter controls on medications and by reducing unnecessary treatments.

Hurst estimates that, if the proposed rate hikes go through, the average family plan premium could exceed $50,000 by January. While he appreciates the governor’s cost-control efforts, he emphasized the need for a freeze on premium increases as essential for real relief.

“From a member’s perspective, the total premium is crippling,” Hurst remarked, adding that there should be some limits on insurance premium hikes.

Eileen McAnany, president of the Health Employers Alliance, pointed out that residents living on fixed incomes facing these drastic premium increases will struggle to afford other necessities like rent and food.

She noted that while regulatory efforts to contain insurance rates have been made in past years and may continue, the fundamental issue—understanding the underlying health care costs—needs to be addressed. “We need efficient, value-based care solutions,” McAnany stressed.

Last year, the health department rejected an initial proposal from Blue Cross Blue Shield and WellSense Health Plan, considering the requested increases excessive.

Blue Cross Blue Shield is set to reveal its plans for 2027 during a public meeting on June 16, with final rates expected by August.