Massachusetts Faces Steep Health Insurance Rate Hike

Massachusetts is facing a significant challenge with health insurance costs. In 2026, eight major health insurers proposed an average rate increase of 13. 4% for individuals and small businesses in the "merged market. " This segment includes around 721, 400 people, excluding government-run programs like Medicare and Medicaid, as well as plans for larger companies. This proposed hike is part of a broader trend of rising health care costs. In 2024 and 2025, insurers proposed increases of 5. 3% and 8. 4%, respectively, with regulators approving slightly lower rates. The current proposal is more than double the 2024 increase, raising concerns about affordability. The state's Division of Insurance has the power to approve or reject these rate increases. In 2010, Governor Deval Patrick encouraged regulators to reject nearly 90% of rate requests, including all double-digit increases. This move led to negotiations and settlements, resulting in smaller rate hikes. Governor Maura Healey is considering a similar approach, which could send a strong message to insurers about the need for affordable health care. The main drivers behind the proposed rate increases are medical and pharmacy claims. Medical claims are expected to rise by 8. 4% and pharmacy claims by 16. 2%. Insurers point to inflation and labor shortages as reasons for higher reimbursement rates from health care providers. Additionally, the use of expensive brand-name and specialty drugs is contributing to the increase in pharmacy claims. The high cost of health care is a complex issue with no easy solutions. Some proposed ideas include capping prices for high-cost drugs and expensive hospital systems, offering less expensive insurance plans with limited provider networks, and eliminating unnecessary administrative costs. The Legislature should explore these and other ideas to make health care more affordable. The impact of these rate increases is real for people like Dayanne Leal. She worked in the health care industry and was laid off in April. Leal hopes to start her own business but is worried about affording health insurance. She found plans with monthly premiums ranging from $600 to $700 for an individual. "Health insurance shouldn't be the reason people abandon their dreams to start a new business, " Leal said. Her story highlights the challenges many face in balancing the cost of health care with their personal and professional goals.