Massachusetts analyzes small business health costs

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June 3, 2011 by Tony Novak

As part of its process to prepare it’s 2011 Health Care cost trends report, this week the Massachusetts Department of Health and Human Services sent a letter to its health insurers like Celticare Health Plan of Massachusetts for input into troubling cost trends.

Among the findings in the previous report, the state found:

  1. Small businesses are paying more for premiums and have experienced sharper growth in rates than mid-size and large employers. 2010 experienced the largest increase in recent years.
  2. Overall enrollment declined in all fully-insured group sectors but increased in the individual and self-insured market sectors.
  3. Deductibles and out-of-pocket costs for policyholders grew substantially, almost doubling over the past three years.
  4. The average size of insured small and mid-size groups decreased, while the average size of large groups and self-insured groups was relatively stable.
  5. The individual sector was significantly older on average than the group sectors, covering relatively few children aged 0 to 19 and relatively more adults aged 60 to 64, despite the inclusion of Young Adult Plans in the individual sector.
  6. Small groups paid 140 percent of what large groups did towards non-medical spending.

These problematic trends indicate to us that the state will likely make changes to its current insurance laws based on any new findings and that the demand for individual supplemental insurance on a voluntary basis will continue to grow. We cover these plans and related news items on the Massachusetts page of the Freedom Benefits insurance exchange.

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