Challenge Looming for 2025
There is a healthcare affordability crisis looming that will likely cause great harm to a growing number of retirees, active employees, and employers – if the underlying causes are not addressed. Rising healthcare costs continue to drive up insurance premiums, copayments, and deductibles for everyone.
Members are likely aware that our Association has publicly sounded the alarm over the past two years regarding our concerns over rising cost. Insurance providers Blue Cross Blue Shield of MA, Point32 (Harvard Pilgrim and Tufts), and Wellpoint have become increasingly vocal of their deep and growing concerns. And state agencies, such as the Group Insurance Commission (GIC) and Health Policy Commission (HPC) have very publicly gone on record, sounding the same alarm and calling for systematic change to gain control over rising costs without cost shifting or degrading the quality of benefits.
The culprit behind increased costs is not higher utilization or even an aging population that requires healthcare services. By all accounts, what is driving costs ever higher are two main factors: the price of prescription drugs and higher prices being charged by hospitals and doctors for medical services.
As you likely know, the United States is the only western country that does not regulate the price of prescription drugs. However, as we have previously reported in The Voice, this has begun to change with Medicare now legally allowed to negotiate the price of a select number of prescription drugs. But the overall lack of control over drug pricing leaves cost increases solely in the hands of the free market and results in higher insurance costs.
We should point out that rising healthcare costs and concern over affordability are not issues unique to Massachusetts. At the Public Sector Healthcare Roundtable Conference earlier in November, which Nancy McGovern and Shawn Duhamel attended, cost and affordability were central themes (see related story p.14). Plans across the country are working to address the same challenges, with varying results.
However, healthcare costs here in Massachusetts tend to run higher than most of the rest of the country. And with roughly 1/3rd of the Commonwealth’s economy directly tied to healthcare, tackling the underlying cost drivers has proven to be difficult in the past.