A year after cost increases that board members called "not sustainable" and "quite disappointing," there was no opposition last week as the Massachusetts Health Connector board approved plan offerings for 2023 that will lead some consumers who buy their health insurance through the exchange to pay an average of 7.6% more.
The board's vote last Thursday gave a final seal of approval to eight insurance carriers that submitted a total of 45 non-group and 57 small group qualified health plans for coverage starting Jan. 1, 2023. While the Health Connector approves the plans that it will offer for sale, the premium rates are filed with and reviewed by the Division of Insurance.
The average change to Health Connector premiums from 2022 to 2023 will be a 7.6% increase for the 85,474 members whose medical coverage is unsubsidized or who receive Advance Premium Tax Credits, Samuel Adams, a senior program analyst at the Health Connector, said. Two dental carriers submitted 12 qualified dental plans for sale on the exchange, and Adams said those plans will see a 0.1% decrease in the premium.
Increases among carriers range from a 5.5% jump for Tufts Health Plan, the lowest, to an 11.9% hike for Health New England, the highest. The average change for the 140,055 people who get coverage through ConnectorCare silver tier plans is a 4.6% premium increase.
The weighted average rate change for the individual and small group insurance market is a 6.6% premium hike, Adams said. Martha Kwasnik, deputy general counsel at the Division of Insurance, said the primary drivers of the increases were increases in provider and pharmacy costs.
"I find it hard, as someone who looks at the financial statements of the health plans, to figure out, given how much money they're making, why our premiums are going up so much," Nancy Turnbull, a board member who worked at the state's Division of Insurance before moving to the Harvard School of Public Health, said.
Board member Rina Vertes, a consultant who previously worked at health care and insurance companies, cited a decades-long difference of opinion with Turnbull and pointed out that the premiums that plans will charge next year aren't necessarily related to past financial performance.
"Current earnings are not necessarily an indicator of what future premium trends and profitability is going to be. I know you don't like that, but I mean, most of the health plans are doing [medical loss ratio] rebates because they did overshoot the mark on their premium rates," she said. "But once that gets trued up, they're still setting pricing for a future period that most definitely is going to be at a higher cost than what it is right now. Is it going to be at this magnitude? That, I can't speak to."
Turnbull and Vertes also spoke up during last year's seal of approval vote. Unsubsidized and APTC plans saw an average premium increase from 2021 to 2022 of 6.9%. At the time, Vertes called the increases "higher than moderate and quite disappointing," and Turnbull said they were "just an enormous testament to the failure of the cost control laws that we've put in place over the last 10 years."
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.
Last week, Turnbull again said that rising premiums threaten to undo the work of another Massachusetts health care law — the law that Gov. Mitt Romney signed in 2006 extending access to health insurance to nearly all Massachusetts residents and requiring them to obtain coverage. In 2021, just 2.4 percent of Bay Staters were uninsured, compared to a national uninsured rate of 9.2%, the Center for Health Information and Analysis reported.
"This seems to me to be just an essential issue for us to dig into with more vigor both as a Connector board, but I think in the service of everyone in the commonwealth," Turnbull said. "Because we know if rates continue to go up at this level without resulting wage increases, we're going to erode the progress that we've made in terms of coverage."
Turnbull abstained when the 2023 seal of approval vote was called. She said she was unhappy with being given only 30 minutes before the meeting to review the materials. Every other board member present voted to approve the plans.
Health and Human Services Secretary Marylou Sudders, who chairs the Health Connector board, said it is important to acknowledge that the last few years have been "just extraordinary outlier years" thanks to the COVID-19 pandemic.
"As we live with this endemic, it really provides that opportunity to really take a look at the health plans and the capitalization and the increases on a go-forward basis as Nancy said, not just as a board member but also just on behalf of the individuals of the commonwealth," Sudders said.
Members of the Health Connector board were not alone in expressing their frustration with the premium rate hikes.
"Increases of this magnitude on already astronomical health care prices will only further threaten access to care for Massachusetts residents," Stephanie Nakajima, executive director of single-payer advocacy group Mass-Care, said. "The Connector and the state have every year failed to control health care costs, which continue to threaten family, municipal, and state budgets; only a public, single-payer health insurance system, which ensures money is spent on actual healthcare rather than excess profits for pharmaceutical companies, hospitals, and health insurers, can put an end to our runaway healthcare spending."
Amy Rosenthal, executive director of Health Care For All, said that the rising premiums will add to the "already heavy burden" for the residents who call her organization's free consumer help line each day because they can't afford health care.
"We cannot just accept these premium increases as a foregone conclusion year after year," she said. "Residents should not have to choose between paying rent or accessing necessary care and prescription drugs."