Health plans seek double-digit rate increases

BOSTON — Business leaders are blasting proposed health plan rate hikes being sought by commercial insurers next year, calling on regulators to reject the higher costs they say will cost jobs and hurt the state’s small employers.

The state Division of Insurance is reviewing proposals from large commercial insurers to increase premium rates by an average of 13.4% next year for merged group health plans offered to businesses with 50 or fewer employees.

The insurance rate hikes, if approved by regulators, would far exceed the 3.6% benchmark for health care costs set by the Massachusetts Health Policy Commission, an agency that tracks health care spending. It’s also nearly double the increases sought by commercial health insurers last year.

Business leaders say the higher rates would add to mounting financial pressure on private employers that already includes rising labor and energy costs, as well as a paid family and sick leave law.

Chris Carlozzi, Massachusetts state director of the National Federation of Independent Businesses, said the rising cost of health care coverage is preventing many small businesses from finding much-needed workers. He called on regulators to reject the increases.

“Unfortunately, small business owners are not strangers to double-digit health insurance premium increases, as they have become a dreaded annual occurrence for many employers,” he said Monday.

“For those businesses that can still afford to offer health coverage, it is an ever-growing portion of their budget that results in less money to reinvest in the business and their workforce.”

The rate hikes will force small businesses into high deductible, higher cost health plans, and they will struggle to hire workers when competing with larger firms and government agencies, “which are able to offer far more robust health benefit packages,” Carlozzi said.

Jon Hurst, president of the Retailers Association of Massachusetts, called the proposed double-digit rates “shocking and unaffordable” and said it shows that “big hospitals and big pharma companies have no clue or concerns about the viability and future of small businesses and their workforces.

“There is no bigger cost of living crisis in Massachusetts than healthcare costs, which are lowering the effective wages of our working families, forcing small businesses to close their doors, and causing an alarming wealth shift through skyrocketing premiums and tax expenditures,” he said in a prepared statement.

“And it is very troubling that there is at least an appearance that our elected officials are more concerned about the finances of the providers than they are the premium payers and taxpayers.”

The new rates would affect more than 700,000 health care consumers enrolled in health plans offered by eight insurers, according to the companies’ filings.

Overall, the requested increases range from 9.9% to 16.2%. The average rate changes were 4.8% in 2024 and 7.8% in 2025, regulators said.

Insurers pointed to hospital and prescription drug costs — specifically the booming demand for new weight-loss and diabetes drugs — which they say are driving much of the rise in medical expenses for many employers.

Blue Cross Blue Shield of Massachusetts is projecting a 12.9% increase for 48 premium plans in the individual and small group market for 2026, affecting about 183,000 individual and group members who renew their coverage for next year.

“Costs for medical care and medications for our members have escalated rapidly and spending is now growing at the fastest rate in more than a decade,” Andrew Lafortune, an actuary for Blue Cross Blue Shield of Massachusetts, wrote in a filing to regulators. “The surge in spending is putting a heavy burden on our employer customers and members who are struggling to keep up with rising costs.”

Other factors driving up medical spending include the use of inpatient and outpatient services, an aging population, and the increased cost of prescription weight loss medicines, the company said.

“The impact of blockbuster high-cost biologics, and other innovative emerging therapies has a material impact on current trends,” he said. “These dynamics put added pressure on medical claims, which in turn causes premiums to increase.”

Mass General Brigham Health Plan is seeking approval to increase its merged market commercial rates by 10.5% next year, according to the company’s filing, impact near the 80,000 people covered by its insurance plans. The insurer also cited rising drug costs, specifically for weight loss treatments.

“While GLP-1s offer tremendous potential, the pricing by manufacturers is creating significant cost barriers for insurers, employers, and consumers,” the health plan wrote in a filing to regulators.

State regulators will hold a public hearing on the proposed health plan increases on June 17. The event will be live-streamed on the agency’s website.

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at [email protected].

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