Rising Health Insurance Costs Strain Massachusetts Families
Modig is acutely aware that health insurance costs will likely continue to climb. While she might not see changes next year, the pressure is mounting. Just last year, her maximum out-of-pocket expense jumped by $1,000 to $4,000. With the family sticking to a tight budget—no vacations, a used car—it’s about to get even tighter.
“I wonder if that shoe can last another year,” Modig mused. “Are last year’s coats still good for the kids?”
Many households in the state share similar worries. During the usual open enrollment period, families such as the Modigs are re-evaluating their insurance premiums. Medical expenses have been climbing and are expected to keep rising, with some employers experiencing premium increases over 10%. Insurers and providers note that this is putting pressure on household budgets.
“This is the toughest health insurance market I’ve seen in 20 years, and there’s no end in sight,” remarked an executive from Borislow Insurance, a company aiding businesses in Massachusetts with insurance options. “It’s only going to get worse.”
Costs are not just rising; they’re intensifying an affordability crisis for residents and businesses. According to the Massachusetts Taxpayers Foundation, which supports pro-business policies, the state has some of the highest employer health care costs in the country. Rising premiums and out-of-pocket expenses have outpaced increases in household income and inflation, making Massachusetts increasingly daunting for residents, noted the Executive Director of the State Health Policy Commission.
Last year, Massachusetts recorded the highest insurance premiums in the nation, with costs consistently increasing over the years—well above the national average. Families in the state spent about $28,151 on employer-based health insurance last year, compared to the national average of $24,540. That’s not even considering additional medical costs like co-pays and deductibles. The total annual cost of health insurance for a typical Massachusetts family reached $32,469 in 2024.
From 2024 to 2025, nationwide family premiums for employer-sponsored health insurance grew by 6%. However, assessing future costs for private insurance in 2026 is complicated due to delays in official data.
No matter how individuals acquire insurance—be it on state marketplaces, through brokers, or directly from insurers—costs are uniformly rising. On state insurance exchanges, where individuals and small businesses buy their coverage, an average premium increase of 11.5% is expected in 2026.
Premiums may increase anywhere from 7.2% to 13.6%, as reported by various plans. John Hurst, representing the Massachusetts Retailers Association, voiced concern over these escalating costs. “We’re at a breaking point,” he said.
Many small businesses fear they won’t survive if costs keep climbing. Research from the Donahue Institute indicated that about half of small businesses in Massachusetts envision having to sell or shut down within five years, excluding those preparing for retirement.
Insurance premium increases can vary based on employer size, healthcare usage patterns, and purchasing practices. Less than half of Massachusetts employers are fully insured, with many facing significant premium hikes of 10% to 30%, especially those with 50 to 100 employees.
On the other hand, most employers are considered self-insured, meaning they handle employee claims directly. Even then, premiums are on the rise, albeit at lower percentages. Mark Gaugna, an insurance president, remarked that this situation is unprecedented in the industry. “We haven’t seen rate hikes like this in a long time; it’s tough for many people now,” he said.
Blue Cross Blue Shield of Massachusetts revealed that its clients might see average premium increases ranging from high singles to low doubles. Meanwhile, another health plan reported potential increases of 15% to 20% for companies with 50 or more employees.
As companies face relentless costs, they are exploring creative methods to offer insurance or alter their coverage. They might shift the full increase onto employees, redesign plans, or raise co-pays and deductibles.
“Premiums are now 20% to 30% higher than ever before. This is crazy,” added a partner at a consulting firm focusing on employee benefits. Cost-shifting strategies are not new; almost half of commercially insured Massachusetts residents now have high-deductible health plans, a significant rise from 2014.
For 2023, the average deductible has also climbed from around $2,300 to over $3,100. Some employers are finding ways to mitigate future increases, expecting their premiums to rise only between 10% and 12%. Still, significant hikes loom for larger groups, with some anticipating initial rates climbing as high as 57%.
The escalating costs have left many patients anxious about their futures.
Joe Delamo, 61, who has been enduring a premium of over $615 a month through his health plan, is facing a $90 increase starting January, alongside a deductible hike of $500. A freelance copy editor, Delamo also drives for Uber but notes that a recent settlement with the rideshare company is essentially negated by his increased health insurance expenses. Recently diagnosed with diabetes, he counts down to when he’ll be eligible for Medicare to finally help with costs. “I just want to make it there while I’m still healthy,” he shared.
