BOSTON — Family health insurance premiums in Massachusetts are the second highest in the nation, according to the Health Policy Commission, and the state insurance department is trying to keep pace with health care inflation as average rates across the individual and small group market rose 7.9% year over year. We are investigating. 2024 course.
At last week’s Health Department hearing, health plans and hospitals were at odds over the causes of soaring medical costs, often pointing the finger at each other, but disagreeing on whether administrative costs are the main driver of inflation in Massachusetts. Divided.
The department has been holding hearings throughout the winter to get to the bottom of the soaring insurance premiums that are burning a hole in consumers’ pockets. The rise to 7.9% in the merger market followed last year’s 3.2% rise.
Of this average weighted increase, the weighted increase in medical costs was 6.6%, pharmacy costs 11.8%, and administrative costs 0.6%. In Massachusetts, there are 648,253 consumers in the combined market, including qualified health insurance plans for individuals and small employers, according to the DOI.
To help reduce costs, the agency will compile a set of recommendations in February based on information gleaned from the hearings, said DOI Deputy Director Kevin Biegun.
Last week’s hearing concerned administrative expenses, an area that all panelists agreed is highly regulated in Massachusetts. The DOI regulates the merger market to not exceed 12% of an insurer’s administrative costs. At least 88% of premiums will be spent on medical services.
Darren Bennett, chief financial officer of the Boston Medical Center Health Plan, and Lucy Silva, chief financial officer of the Massachusetts Comprehensive Brigham Health Plan, are both investing in mobile apps, call centers, List of online providers.
“We’re in the digital age, and we’re really entering that era, and right now the focus is on making sure we have the right access,” Silva said. “Even ID cards are largely digital, which is what many of our members prefer. We expect all the information we need to be very easily accessible and available on mobile.”
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Bennett said adopting artificial intelligence and automation to streamline operations in some areas could reduce administrative costs.
“The key thing I’m asking you is, this is what it is: The expenses you’re describing are part of the nature of running a health plan, and the expenses you’re actually reporting evolve over time. ‘We try to find new ways to make things more efficient, but we’re still constrained by having to make sure we’re within 12%,’ Biegun said.
Bennett and Silva agreed, pointing out that hospital and prescription costs instead drive up premiums.
But some health care provider panelists again pointed to plans to increase health care costs.
“Hospitals and healthcare providers contract with a large number of different health plans. Each of these plans includes a large number of products. Each of these plans has many contracts with contracted vendors, including outsource the services of [pharmacy benefit managers]like radiation management, like behavioral health. For each of these situations, hospitals and doctor’s offices deal with a number of different rules, regulations, requirements, determinations of medical necessity, and when prior authorization is and is not required. There is a need. All of this results in significant costs on the provider side. None of that was mentioned in the conversation we just had,” said Karen Granoff, senior director of managed care policy at the Massachusetts Department of Health and Hospitals Administration.
Dr. Barbara Spivak, an internist at Beth Israel Lahey Health and past president of the Massachusetts Medical Association, said hospitals could face backups due to administrative issues at the health plan.
Spivak said she recently had a patient who took three weeks to get pre-approval for a drug she recommended. The first approval was denied and the patient had to appeal. Eventually, she said, her patient ended up in the emergency room.
“I think the administrative waste that comes from delays in access and delays in care related to prior authorization is something that should be fixable at the system level through statewide policy. It doesn’t take a genius. We all know that they are We know what they are and there are ways to fix them,” she said.
