State lowers cap on some patient health care cost increases

Some Massachusetts residents could see more than $230 in average annual savings under a new state effort to restrict the growth of health insurance deductibles, copays and other out-of-pocket costs.

In 2027, health insurance companies must limit patient cost-sharing increases to 3.6% for the merged market where many individuals and smaller employers get insurance, Gov. Maura Healey's office announced Monday.

The administration highlighted Feb. 27 guidance that the Division of Insurance issued to insurers, which faced a Friday deadline to submit proposed rate filings. Insurers were required to explain how their filings address "affordability for consumers and purchasers of health insurance products."

"Health care cost pressures are front and center, and this action protects families at a time when they need our assistance more than ever," Insurance Commissioner Michael Caljouw said in a statement.

Caljouw last week said insurance had become "increasingly out of reach and unsustainable" across the market.

A 2025 healthcare market oversight law strengthened Caljouw's authority to monitor affordability within the merged market and gauge whether proposed rates are "excessive." Caljouw flexed that affordability lever last year when the DOI limited cost-sharing growth to 4.8%.

The latest restriction is expected to save patients an average of $232 annually, Healey's office estimates.

"We know that families across Massachusetts are struggling to afford health care, and unpredictable out-of-pocket costs are a major driver of that," Healey said. "Last year, I was proud to become the first governor in Massachusetts history to cap co-pays and deductibles, and now we're lowering that cap even further. These will be the tightest limits in the country to make sure the people of Massachusetts can afford to get the care they need."

Jon Hurst, president and CEO of the Retailers Association of Massachusetts, said the state needs to more fully reform the merged market. As more businesses move to self-insured plans, fewer small businesses are paying to cross-subsidize individual health insurance plans, he said, and the latest move will push costs to premiums.

"I'm not feeling the love with this," Hurst told the News Service. "It's not going to cut the cost of health insurance for a small employer and their workforce in Massachusetts. Premiums are going to go even higher."

He added: "The only way this works would be to also limit premium increases at the same level, hospital reimbursements at the same level, prescription drug prices at the same level, and healthcare union contract increases at the same 3.6% increase level."

Noting some of his association's members are paying $47,000 a year for a family health insurance plan, Hurst said the state needs to "cap off exploding provider prices" that exceed a cost control benchmark.

"I think they understand that something is incredibly wrong, but they are playing at the margins," Hurst said.

The Massachusetts Health Connector Board in February decided to freeze 2027 deductible limits as part of their role in overseeing the details of insurance plans that meet minimum state standards. The limits are $3,200 for individuals and $6,400 for families.

Insurance regulators last week finalized regulations to scrap prior authorization requirements across a bevy of routine services, which are also expected to yield cost savings. Patients and providers are expected to benefit from the changes by the end of the year, Caljouw said.

Lora Pellegrini, CEO of the Massachusetts Association of Health Plans, has repeatedly urged state officials to address the underlying issues driving cost pressures, including rising hospital prices, outpatient facility costs and prescription drug spending. Insurers have stopped covering GLP-1 drugs that surged in popularity because they helped people lose weight, and the strategy appears to be helping to control health plan costs.

"While efforts to limit deductibles and copays may provide short-term relief at the point of service, they do nothing to address the root causes of rising health care spending," Pellegrini said in a statement Monday. "In fact, they risk exacerbating the problem by pushing more costs onto individuals and small businesses through higher premiums."

Citing the pressure of rising costs, Hurst noted that a Retailers Association poll conducted in late April and May by Polity Research Consulting found 75% of the 608 Massachusetts registered voters surveyed believe the state mandate that people have health insurance or pay a tax penalty should be repealed.

Blue Cross Blue Shield of Massachusetts posted an operating income of $17.4 million in the first quarter of 2026, compared to a loss of $9.8 million at the same time last year.

"The results reflect Blue Cross's discipline in managing the rapid growth in medical and pharmacy spending on behalf of its members and employer customers," the insurer said Friday, while also attributing the improvement to "a milder than expected flu season and changes to its coverage of GLP-1 medications."

Point32Health reported an operating income of $86 million for the first quarter of 2026, compared to a loss of $39 million for the same period last year.

"While we are optimistic for the remainder of the year, we recognize that medical and pharmaceutical cost trends remain volatile and will continue to present challenges," Point32Health Chief Financial Officer Michael Marrone said.