Small Biz Insurance Rates Hold Steady In Mass, For Now

The latest small business health insurance rates may be the calm before the storm.

Premiums for small firms are set to increase from a base of 2.5%, on average, in July. That’s slightly less than the average increase of 2.7% this quarter. Employers willing to live with limits on where they and employees receive care could see premiums drop (take a look below at Neighborhood Health Plan and Celitcare). And notice that no one filed (or was approved for) rate increases above 3.6%, the current magic number for health care cost caps in Massachusetts.

July 1 insurance rates for small businesses in MA

July 1 insurance rates for small businesses in MA

But things may look quite different as of January 1st. Very small businesses could see modest increases or perhaps lower rates. But insurers are warning that firms with 20-50 workers could see premiums jump 30% when parts of the federal health care law kick in next year.

“We all thought that Mass. was going to be held harmless under the ACA, but that looks like that’s not going to be the case, at least not for small businesses,” says Jon Hurst, President of the Retailers Association of Massachusetts. “We’re going to be looking at a lot of small businesses getting extreme, double digit increases come next year.”

Undersecretary for Consumer Affairs Barbara Anthony has some advice for small employers. “You may get an increase if you do nothing,” says Anthony, “but if you’re willing to shop around, and look for better deals, this is going to be a dynamic market. And the people who are willing to shop around, to vote with their feet, are going to make out fine.”

The best deals will likely be plans with high deductibles or those that limit where you can get care.

Please follow our community rules when engaging in comment discussion on this site.
  • Brian Rosman

    Insurers have been telling us for a years that health insurance rates reflect the underlying cost of medical care. The changes to insurance regulations won’t affect the cost of medical care. In fact, the work to transform our health delivery system to focus on prevention and coordinated care has the potential to reduce the cost of medical care, lowering premiums.

    Virgina asks the right question. She’s right that the Division of Insurance retains the right to reject unreasonable insurance rates. There’s no magic figure of 3.6% (that’s the goal for total medical spending, not insurance premiums, and it’s just a goal), any unjustified premium increase can be rejected. And she’s right that Massachusetts still insists that insurers devote at least 88% of premiums to medical care.

    And AmanaPlan asks good questions too. The answer is that for 7 years, larger small groups have received an unjustified discount off their base rates, and smaller small groups and individuals have had to pay an unjustified surcharge. The ACA forbids both the discount and the surcharges. So the larger small businesses (35-50 workers, about) are squawking, but they were able to get a special benefit for years. Rates will go down, however, for lots of small retailers and other small businesses with under 30 or so workers. Mass has negotiated a 3-year phase-out of the current system of surcharges and discounts, to the more fair system of everyone paying their appropriate base rate.

    Brian Rosman
    Health Care For All

  • Virginia

    Doesn’t the MA insurance commission have to OK increase in premiums for any company doing business in MA? And I understood that the ACA has a ratio of costs of patient care to profit for insurers, or they have to pay back the premiums to subscribers. Have companies looped around the laws? Or has the state or the Fed folded?

    • Reasonable?

      Virginia,

      the MA commission only has to approve increases above 3.6 percent.
      Insurers can independently make any change below 3.6 percent (including decreases).

      Note that the some the big insurers have increased by exactly 3.6 for the last 2 quarters.

  • AmanaPlan

    I wish this article had given some reason that explains the need for a 30% increase of small business premiums. Why would they be different than premiums for individuals, for instance. Are the small business premiums currently lower than other classes of premiums?

  • Reasonable?

    I guess this is progress, but not good enough.
    It would be great to see quarterly growth in health insurance premium costs against quarterly small business growth. Is that possible?

    I’m thinking that even these percentage growths are likely outpacing business growth.
    That’s still a problem.
    Mediocre health care is eating up our wages.
    Sucess would be stable or shrinking health care cost.
    We should not settle for less.