The Massachusetts Health Connector on Thursday unanimously signed off on a suite of plan offerings for 2022, even as some of its board members raised concerns with rising costs they described as unsustainable.
Board member Dimitry Petion said he cast his approval vote “begrudgingly” for the plans, which feature an average 6.9 percent premium increase for the 85,138 members whose medical coverage is unsubsidized or who receive Advance Premium Tax Credits. Many of these plan subscribers do not get insurance through employers.
With member aging taken into account, the 6.9 percent rate increase for unsubsidized non-group members becomes about an 8.5 percent increase.
The premium changes vary by tier, with the “Bronze” plans facing the steepest increase, at 8.1 percent without aging or 9.9 percent with aging. Of the different tiers, the Bronze level has the most members — 38,208.
The Silver tier has the second-most members (33,462), and the smallest average premium increases (5.9 percent, or 7.5 percent with aging).
No insurance carriers are leaving or newly entering the Connector in 2022, and the board’s vote gave a final seal of approval to nine insurance carriers that submitted a total of 52 non-group and 64 small group qualified health plans. Two dental carriers submitted 12 qualified dental plans for sale on the exchange.
The presentation from Connector staff described the premium hikes as “moderate,” but board member Rina Vertes called them “higher than moderate and quite disappointing.”
Nancy Turnbull, who worked at the state’s Division of Insurance before moving to the Harvard School of Public Health, said the increases are “just not sustainable.”
“I look at these, I think they’re certainly just an enormous testament to the failure of the cost control laws that we’ve put in place over the last 10 years,” she said.
Massachusetts in 2012 passed a law aimed at reining in rising health care costs. That law, along with encouraging alternative payment and care delivery models focused on preventative care and patient health, sought to limit cost growth by creating an annual benchmark against which the increased spending is measured.
In 2019, the second consecutive year in which cost growth exceeded that target, a 4.3 percent increase brought the state’s total health care spending to $64.1 billion.
Turnbull noted that next year’s average premium increases are “twice, if not more” than the 3.1 percent benchmark. She said many insurers “continue to have profit margins that are bigger than I’ve seen in many years of looking at them.”
Mark Gaunya, who holds a seat on the Connector board representing insurance brokers, said that, for many years in a row, he has been “saying health insurance is expensive because health care is expensive.”
“Actuarially, these numbers are what they are because of the underlying contracts that exist between the provider community and the insurer community,” Gaunya said. “The reality of COVID was there was a tremendous amount of lost revenue in the hospital systems and they are trying to recover some of that.”
Insurance carriers “are feeling greater pressure” from COVID-19 tests and vaccines and “increased cost pressure from providers associated with PPE costs,” Deputy Insurance Commissioner Kevin Beagan said.
“It was not a year that we were happy with the level of rate increases. We did push back on many of the company numbers,” he said.
Consumer advocacy group Health Care for All said the nearly 7 percent premium increase underscores a need to reform the state’s rate review process, calling for passage of a bill (H 1247, S 782) that would, among other measures, enhance the division’s ability to modify or disapprove proposed rates in certain cases and increase transparency around what drives the hikes.
“Policymakers must move swiftly to both improve our state’s rate review process and address underlying costs,” the group’s executive director, Amy Rosenthal, said in a statement. “This requires also passing legislation to lower prescription drug costs and increase transparency for high-cost hospitals. It is unacceptable for health care premiums to continue to be ratcheted up on families and businesses at this rate, and help is needed urgently [to] give residents across the state critical relief.”
Some Connector board members also indiciated they’d like to see some sort of state action.
Vertes, the president of Marjos Business Consulting, said that as health care becomes less affordable, subsidies continue to increase so that state and federal governments “are paying the price for us not addressing the underlying drivers of health care costs.”
“As taxpayers, that should be incredibly concerning to us,” she said. “I cannot emphasize enough, as a commonwealth, we have got to stop making observations about the cost of health care and [start] taking action to actually address it.”
The Connector board is not the only state entity where members have their eye on the burdens that health care costs create for consumers.
The Health Policy Commission, an agency created under the 2012 law, heard at a July meeting that average total costs for Massachusetts family health insurance premiums roughly tripled from 2000 to 2019.
Other than heightened attention to rising expenses, the state does not face formal consequences for exceeding the health care cost growth benchmark. HPC members this summer expressed interest in strengthening the accountability measures, with Chairman Stuart Altman saying, “The game is now getting tougher and what we’re recommending is that the process also needs to get tougher.”
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