State requiring health insurers to curb increases to deductibles and copays next year
Photo | Courtesy of Chris Lisinski, State House News Service
The Massachusetts State House
Health insurers in Massachusetts must curb increases to deductibles and copays starting next year, as the Division of Insurance flexes its new authority under a 2025 law that gives officials heightened scrutiny over health care costs.
The insurance division issued regulatory guidance on March 12 that requires insurance companies to restrict the growth of deductibles and copays to the rate of medical inflation, which is approximately 4.8%.
Gov. Maura Healey's office highlighted the guidance Thursday, which marked the deadline for insurers to file rate proposals with the insurance division for calendar year 2026.
"Deductibles and co-pays have been growing too fast – now outpacing wages and salary growth for our residents," Insurance Commissioner Michael Caljouw said in a statement. "Today's announcement is an important first step to protecting our residents from these difficult costs."
The head of a trade group representing health insurers said DOI's caps will "not make care more affordable."
"[I]t will simply shift costs into premiums, raising monthly expenses for everyone," Lora Pellegrini, CEO of the Massachusetts Association of Health Plans, said in a statement to the News Service.
She attributed rising costs to escalating prices charged by hospitals, providers and pharmaceutical companies.
"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 fact, they risk exacerbating the problem by pushing more costs onto individuals and small businesses through higher premiums. If we are serious about improving affordability, we need structural reforms that hold all parts of the health care system accountable, including providers, hospitals and drug manufacturers whose unchecked price growth is driving this crisis."
Caljouw in February had warned the Health Connector Board that rising deductibles may prompt patients to forgo or self-ration care. Higher deductible limits can translate into policyholders paying more out of pocket for their health care, a strain that is exacerbated by rising premiums.
Connector Board members in February voted to raise the minimum creditable coverage deductible limit for individuals to $3,200 in 2026, up from $2,950. Regulators set deductible limits each year that clarify what type of plan coverage is sufficient to meet the state's insurance coverage mandate.
The market review law, which Healey signed in January, updates the rates review process the insurance division. Regulators are tasked with gauging whether proposed rates are "excessive" by taking into account "affordability for consumers and purchasers of health insurance products."
The rate filings due Thursday follow a request from the insurance division for insurers to explain how the proposals address affordability. Insurers also had to outline how average cost sharing, including deductibles, for eligible individuals and small employers "has not increased on a year-over-year basis by more than the New England Consumer Price Index for health care for November 2024, except as necessary to meet federal Actuarial Value (AV) calculator requirements," according to the bulletin.
DOI this summer said it plans to work on regulations that "define and address affordability standards."
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