Rising costs impact healthcare | News

BOSTON — Massachusetts health plan net worth ballooned in the years of the pandemic. This is because toll payer premiums have continued to rise and more bay starters have signed up for plans with higher deductibles.

According to a recent report by the Massachusetts Hospital Association, as of December 2022, the net worth of Massachusetts health care insurers will exceed $6 billion, a 20% increase from 2019 to 2022, and from 2018 onwards. This means that the total number of employees increased by 34%.

Health insurance groups attributed the increase in net worth in part to several years of strength in the stock market, especially after the COVID-19 pandemic saw insurers give payers a break. Surpluses and reserves are important for stability in uncertain times.

Overall profitability for acute care hospitals in Massachusetts was also trending upwards with the latest data available for hospital fiscal year 2021 (through September 2021 for most hospitals). The State Medical Information Analysis Center reported that the hospital’s profitability he increased by 2.6 percentage points. Comparison with previous hospital fiscal year.

It says the financial situation and outlook varies from hospital to hospital, and that the health care system, which serves a disproportionate number of patients on Medicaid, is in trouble.

Meanwhile, insurance premiums are rising at a faster annual rate than wages and local inflation. CHIA reported that premiums increased at an annual rate of 4.7% from 2019 to 2021. Claims covered by payers and employers increased by 5.7%.

Wages and salaries in Massachusetts rose just 2.6% over the same two-year period, according to CHIA, while local inflation rose 2.2% and failed to keep up with rising health care costs.

As insurance premiums outpaced income growth, so too did patients pay for health care.

According to CHIA’s annual report, member cost contributions for private commercial health insurance plans increased 16.9% in 2021 to $58 per member per month. At the same time, more and more people are opting for higher deductible plans to save on ballooning premiums.

The number of high-cost medical insurance subscribers with increasing out-of-pocket costs until the deductible is capped will increase by 4.1% in 2021 and now accounts for 42.7% of the total number of subscribers in the private commercial market.

Massachusetts Retailers Association president John Hurst said, “With each passing year, you get less coverage and pay more premiums.”

According to the Massachusetts Health Hospital Association’s semiannual medical plan performance report (which is private but privately shared with member hospitals), the 2018 plan had $4.5 billion in contingencies, compared to , was $6.06 billion in 2022.

“The pandemic has caused hospitals to postpone elective procedures, patients to postpone treatment, and medical insurance continued to raise premiums and increase surpluses, even as total medical costs declined in 2020.” MHA writes. About the state health plan, about the weekly newsletter report. Hospitals and insurance companies negotiate rates with each other.

Soaring nursing care costs

Insurance companies hold surplus funds to fund their obligations in the event of unforeseen circumstances.

Lola Pellegrini, president of the Massachusetts Health Planning Association, said the pandemic has shown why it’s important to have reserves that can be put to use.

“No one got unduly wealthy during the pandemic. This plan has done a lot to help the state, health care providers, our community and our members.” said Pellegrini. “Dear employers, some people cannot pay their premiums. Even though they were unable to pay their premiums, we kept them and their employees insured… We’ve done that and put our reserves and surpluses to pay for those costs.”

She added, “That’s what you want. You want stable medical insurance.”

Pellegrini said rising costs for health care providers and pharmacies have forced health insurers to raise premiums.

“Premiums reflect the cost of treatment,” she says. “We need to look at the underlying reasons: provider fees, the highest unit prices in the nation, and prescription drug costs. there is.”

Alex Sheff, policy director at consumer advocacy group HealthCare for All, said the recent premium hikes are part of a broader trend of rising health care costs over the past two decades.

“Consumers cannot be the only ones to bear the burden,” Chef said. “In terms of system costs, what is needed now is to contain some of the most expensive hospital and prescription drug costs in order to strengthen the reimbursement process for insurers in response to premium increases.”

Hurst said small businesses were disproportionately affected by what he described as a “death spiral” due to rising healthcare costs.

Hirst said employees are shifting to spousal plans, taking out self-insurance and turning to cheaper state-owned markets known as Massachusetts Health Connectors.

Older employees, who may be more prone to health problems, pay more when younger, healthier employees who have other insurance options opt out of insurance through work. will be

Massachusetts’ small group market (for businesses with 50 or fewer employees) will see policyholders decline from 822,000 in 2006 to 335,000 in 2022, according to data provided by RAM. decreased by 59%.

“The problem for small businesses is that they are less competitive. If you’re not competitive in health insurance, you’re at a huge disadvantage against your big competitors,” Hurst said.

He added, “Medical insurance and hospitals are at odds, but both benefit more by raising premiums. And that creates unaffordable healthcare inflation.”

Hurst said state-run programs to ease high insurance premiums put a lot of pressure on small business plans.

Expanding scope of application through subsidies

Gov. Maura Healy last week signed into the Fiscal Year 2024 Budget, which includes a two-year pilot program that expands the ConnectorCare income limit from 300 percent to 500 percent of the federal poverty level. The state advertises ConnectorCare insurance as offering “$0/month or low premiums, low copays, and no deductibles.”

Under the new program, individuals with an income of $72,900 or a family of four with an income of $150,000 are eligible for this coverage.

Hirst said the pilot would be a “small and medium-sized business” because more employees who are currently eligible will shift to lower-cost health insurance, and higher costs will shift to those who remain on small-group plans. It will accelerate the company’s problems,” he said.

At the HealthConnector board meeting on Monday, Health and Human Services Secretary Kate Walsh asked HealthConnector executive director Audrey Morse-Gasteer about the pilot’s impact on insured people through small businesses.

“Even if you have insurance provided by your employer to be eligible for ConnectorCare, and even if you are able to get it, you cannot access insurance at an affordable price. is not happening,” Gastier replied.

Pellegrini said the Health Planning Association also expressed concerns about expanding ConnectorCare, but did not formally object when it was brought to the governor’s window.

“However, this will require ongoing review and, in two years’ time, will represent a huge additional financial burden on the state, impacting the merger market,” Pellegrini said.

An estimated 50,000 people will be eligible for new state subsidies. Health Connector’s director of communications, Jason Lefferts, said the expansion would cost the state $130 million in calendar year 2024.

Health Care For All’s chef said the expansion of ConnectorCare was “life-changing” for some in the face of soaring medical costs.

Taunton-based bus driver Kara Foster is one of an estimated 50,000 people recently covered by state-subsidized insurance. She said she loves her job helping students with disabilities get to and from school, but she doesn’t get insurance from her employer.

Her husband had just retired and Ms Foster was worried that he would lose his insurance.

“The whole process of my husband leaving and then needing health insurance was everything. ‘Do I have to quit the job I love so that I can go sit in a private office at work to get insurance? “I thought. said Foster.

The bus driver said he was on four different medications and was worried about how much they would cost and whether he would have to find alternatives.

“This will change everything for me,” she said

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