HEALTH INSURERS are once again asking small businesses to shoulder hefty premium hikes, tightening the vise of the affordability debate that’s consumed state government heading into election season.
Insurers collectively want to increase rates nearly 13 percent in 2027, which would be the second straight year with double-digit growth in premiums paid by the many employers and individuals who make up the “merged market.” The proposals represent an opening salvo in a process that will stretch several months, likely involving negotiations between health plans and state regulators.
The eye-popping numbers land as policymakers confront a growing sense of economic malaise creeping across the state. Eileen McAnneny, president of the Employer Coalition on Health, warned that employers are “at a breaking point.”
“Double-digit rate increases again this year, in the midst of an affordability crisis, are unacceptable,” McAnneny said. “We need to address health care costs with an urgency that we haven’t seen to date, or we’ll see fewer small businesses able to afford insurance.”
The state Division of Insurance published documents late Friday afternoon — with attention already turning to the start of a three-day holiday weekend — revealing how insurers want to adjust next year’s rates in the merged market, where costs are greater than those faced by larger employers. Altogether, the insurers represent nearly 700,000 members, so changes would affect a smaller subset of people than larger commercial plans or publicly funded coverage like MassHealth.
Blue Cross Blue Shield of Massachusetts, which has the most members of the merged market insurers, wants to bump up premiums 15.3 percent next year. Boston Medical Center Health Plan and Tufts Health Public Plans, the second- and third-largest insurers in the group, sought increases of about 12 percent.
The biggest proposed hike came from Fallon Community Health Plan, which has just shy of 30,000 enrollees and wants to raise premiums by a whopping 25 percent. On the other end of the spectrum, Harvard Pilgrim Health Care is seeking a comparatively small bump of 6.7 percent.
Altogether, the proposed changes average out to about 13 percent growth, which would be a bit larger than what regulators approved last year and roughly four times the increase in 2024. Each change, even Harvard Pilgrim’s, would be well above the overall rate of inflation.
Massachusetts Association of Health Plans president Lora Pellegrini, whose group represents insurers, attributed the increases to higher costs that insurers themselves are facing, including a growing share of services provided in pricier settings and rising drug prices. “All of these factors are driving increases in health care premiums,” she said.
Insurers had reported significant financial losses in recent years, though the outlook at a few of the largest insurers rebounded in the first quarter of 2026.
Individual patients, employers who pay for insurance, and government payers are all increasingly burdened by the rising price of health care. The average family health insurance premium grew from about $7,300 in 2000 to $28,150 in 2024, according to the state Health Policy Commission, and premiums continue to increase more quickly in Massachusetts than in the rest of the country.
A set of compounding regulatory changes have led to the significantly higher rates in the merged market compared to the state as a whole. Jon Hurst, president of the Retailers Association of Massachusetts, said the newest proposed merged market hikes would force many small businesses to pay “well above” $50,000 in premiums for a single family’s health insurance next year, unless they opt instead for a high-deductible plan.
But he doesn’t think insurers are fully responsible for the strain. Instead, Hurst directed most of his frustration toward lawmakers and the governor.
“You can’t blame Washington for this. You can’t blame the insurers, the providers, the health care unions, or Big Pharma,” Hurst said. “You have to look in the mirror and blame yourselves if you’re Beacon Hill because they’ve done nothing to mitigate these costs and create some level of fairness and affordability, particularly for small businesses.”
Last year, insurers at first sought merged market premium increases averaging 13.4 percent. Gov. Maura Healey dubbed their proposals “simply unsustainable” and called on policymakers to “do much more to lower the cost of health care in this state.” Regulators were able to trim a bit through negotiations, settling on average hikes of 11.5 percent.
The stakes could be even higher for the governor and her deputies this time around as she runs for reelection. Her Republican opponents have sought to make the state’s high cost of living a central issue in the campaign — a topic Healey, too, references nearly every day.
Healey’s office did not immediately respond to a request for comment Friday afternoon.
Just days before DOI made public the sizable premium increases that insurers want, Healey touted regulatory guidance that requires insurers to limit how much they grow copays and deductibles. Hurst said that effort, while appreciated, is not enough to move the needle. Limits on these cost-sharing charges to patients, he said, will only put more pressure on overall premium costs.
“You’re just pushing one side of the balloon, and it’s popping out the other side,” he said. “You need to cap premiums.”
