Health New England is filing rates for Individual and Small Group medical plans in Massachusetts effective January 2024 through December 2024. In accordance with the requirements of Section 1003 of the Patient Protection and Affordable Care Act, below are the justifications for these 2024 rate increases. The average rate increase effective January 1, 2024 was 7.19% which can vary for a specific member or group depending on the plan of benefits selected, member’s age or group demographic makeup, and service area. The key drivers of the increases were:

• Health insurance premiums reflect the cost and usage of medical care and services. Health New England (HNE) has been impacted by increases in these areas due to higher costs for medical services and prescription drugs and costs related to the ongoing ripple effects of COVID-19. As a result, our medical and pharmacy trends, used in premium rate development to project costs for inpatient and outpatient hospital-based care, physician services, and prescription drug costs, continue to rise.
• The largest driver of HNE’s 2024 requested rate increase is a rise in the costs of medical services and drugs. Pharmacy costs are expected to increase by 8% in 2024. This increase is tied to a number of new high-cost therapies. Members are also expected to use 4% more prescription drugs in 2024.
• Physicians and hospitals are facing economic pressures caused by supply chain shortages, overall inflation and continued workforce challenges. As a result, providers are seeking higher reimbursement for their services. HNE is routinely required to increase service reimbursement rates at levels that exceed the 3.6% cost control benchmark, established by the MA Health Policy Commission, in order to maintain its robust provider network.
• Hospital services are expected to be 5.1% more expensive in 2024 and the use of those services is expected to grow 2-3%. Both the increase in cost and utilization are in part caused by members deferring care during the COVID-19 pandemic. The delay in care resulted in increased severity of conditions and a growing need for intense treatments.