Rates are going up by an average of nearly 15 percent over the next six months.
Small Business Healthcare Premiums Increasing Again
Health insurance premiums are rising
again for Massachusetts small business owners, and the rate of increase is
nearly twice the pace of last year.
The Massachusetts Division of
Insurance announced the rate increases last month. For small businesses who renew
their plans on Oct. 1, their rates will rise by 8.2 percent on average for the
fourth quarter of 2016. This rate hike follows a 6.3 percent increase in Q1, a
7 percent increase in Q2, and a 5.4 percent increase in Q3, according to Boston Business Journal.
The
Boston Globe reports that 106,426 people working at companies with fewer
than 50 employees will be affected by these plan increases. For members of Blue
Cross Blue Shield’s HMO Blue plan, rates will increase by 4.6 percent. Harvard
Pilgrim HMO plan members will see rate hikes of 14.2 percent, and Neighborhood
Health Plan rates will rise by almost 18 percent. New rates for the first
quarter of 2017 are also expected to increase 6.7 percent on average.
The Massachusetts Division of
Insurance pointed to higher drug costs and hospital costs, as well as
subsidization of plans with less healthy members, as the reason for the premium
increases, and this news also comes on the heels of the state’s biggest
insurers reporting losses. Blue Cross Blue Shield, Harvard Pilgrim, and Tufts
Health Plan reported a total of $201 million in losses for the first two
quarters of 2016, due in part to the cost of complying with the Affordable Care
Act (ACA). Losses like these have led many insurers to pull back from the ACA
marketplaces nationwide, leaving many to wonder if ACA is sustainable.
