By Jeffrey Gold, MD & Jon Hurst

• Massachusetts has among the highest health insurance premiums in the country.
• A regulatory system that subsidizes and enables high-cost academic medical hospitals to acquire smaller hospitals, primary care practices, and expand throughout the state, creating multi-billion-dollar companies that drive up our premiums and erase competition.
• Heavily regulated health insurance companies that pass on the cost of government mandated benefits and provider prices to consumers, resulting in unaffordable premiums and products that offer less choice at higher costs. 
• Small and mid-sized employers exiting the fully insured market and opting for self-insured plans to avoid government mandates in search of cost relief, resulting in huge premium increases for the remaining groups in the fully insured segment --individuals and small businesses.
• Enrollment in high-deductible plans more than doubling over the last decade, shifting expenses to consumers with higher out-of-pocket costs.
• A medical loss ratio law that has delivered higher premiums and profits for insurers and hospitals. 
• Nearly 60 mandated health benefits that now make up over 24% of premiums for small businesses and consumers.
• Over one third of Massachusetts residents enrolled in Medicaid. 
• A cost containment benchmark of 3.6% that provider spending routinely exceeds by 2 to 3 times, without any consequences. 
• More than 90 percent of medical spending in Massachusetts goes toward hospital-based care, or sick care, while less than 8% of dollars go toward primary care or wellness.
• Annual health care spending makes up over 11% of the state’s economic output, or GDP, as of 2023 and growing.

Twenty years later, we have a system that is too expensive for working families.  How do we fix it?  

Let’s start here:

1. Consumer Choice and Affordable Products: If premium payers had the right to choose the type of coverage they want, they could save tremendous amounts of family income, and it would shift the financial incentives to force providers to be efficient, as opposed to forcing consumers to pay more for less.  We need to revise insurance laws to create these incentives and products. Numerous state mandates passed by the Legislature were due to pressure from specialty providers seeking to increase their utilization and reimbursement levels.  Government should give premium payers the right to choose a product that comes with fewer state mandates, excludes certain high-cost providers, and promotes the use of generic drugs.  

2. Bolster Access to Primary Care: Grant premium payers the right to pay their primary care doctor directly utilizing their HSA’s rather than through their insurance, which should save at least 15% of premium.  Through direct primary care and a variety of subscriber and premium payer cafeteria plan choices, consumers can be empowered to save over half of their premiums—cutting a small business family plan to under $20,000 annually, while allowing those same families the ability to get better, higher value care.

3. Incentivize Growth of Independent Primary Care: We need more independent primary care practices which put the patient and their families first, at lower costs.  This means incenting independent practices to thrive as independent organizations, not owned by hospitals or health insurance companies. Two ways to enable more independent primary care practices to grow include tax incentives and reforming the determination of need process. The state should offer tax credits that enable independent practices to acquire medical and or technology equipment. The state used a similar strategy for life sciences 20 years ago and it resulted in a thriving industry. The state can also exempt independent primary care practices from the Department of Health’s Determination of Need regulatory process, which today deters practices from buying equipment like CT scans and x rays, because it competes with hospitals. Exempting independent primary care practices from the DoN rules would allow them to offer these services at a fraction of the cost we pay today at the hospital. 

4. End Small Business Insurance Discrimination: Small businesses here operate under the most discriminatory insurance risk pool rules of any state in the nation, requiring Main Street employees to pay higher premiums so that individuals can pay lower premiums.  Forced into the same risk pool, only in Massachusetts do small businesses pay higher premiums to cross subsidize premiums for individuals.  Most of those very same individuals also get generous taxpayer funded subsidies through the Connector.  This is an anti-small business, public policy failure. 

5. Reform the Cost Containment Benchmark: The Health Policy Commission’s spending benchmark is flawed and flaunted by healthcare providers.  Since the benchmark includes Medicare and Medicaid spending, it masks the annual double digit spending increases occurring over the last decade in the commercial market.  Lower the benchmark and establish prohibitions--or penalties--for contracts that advance provider reimbursements above the benchmark.   

6. Reward Insurers For Lower Premiums, Not Higher Provider Reimbursements: Medical Loss Ratios (MLRs) have been an inflationary failure for apportionment of care verses administration.  State and federal law have MLRs, but the Massachusetts law is far more restrictive.  Saying that insurers must apply at least 88% of premium dollars to medical care sounds reasonable, until you look at the impact over the last decade in the Commonwealth.  Cash strapped insurers have one financial solution to seek more revenue—raising provider reimbursements, and in turn, consumer premiums.  All the financial leverage is with the providers, not the insurers, and not with their customers.  Look no further than the millions of dollars the dentists spent a couple of years ago for a ballot initiative to establish a first in the nation law to apply the same concept to dental insurance.  The dental providers wanted a piece of the same inflationary action healthcare providers have enjoyed in the Commonwealth.  Insurers should work for the premium payers, not the providers, and should be compensated for how much they SAVE their customers, not by how much they increase provider reimbursements.   

7. Reform Taxpayer Funded Health Programs: The proportion of taxpayer dollars going to the primarily non-taxpaying healthcare industry in the state is an economic death spiral.  Remarkably, half of the state mandates apply to the state Medicaid program, and all apply to the subsidized Connector plans, raising costs for taxpayers. The state should eliminate state mandates not required under federal law for MassHealth and Connector subsidized products; and the state should lower the eligibility levels of ConnectorCare subsidized plans back to the 300% of federal poverty level, which had expanded on a pilot basis.  Also, hospital reimbursements under MassHealth should be capped at no more than 140% of Medicare, more than sufficient for any efficient hospital. 

8. Repeal the Individual Mandate: Repeal the Chapter 58 tax penalty for those who do not purchase health insurance.  Residents are seeing their take-home pay shrink because of higher premiums, co-pays, deductibles and taxes; and all of this is due to the fact that they are not empowered and permitted under the law to buy affordable coverage they need, want or can afford.  So how do we continue to justify a tax penalty?

2026 is the year we must come to terms with what we did right, and what we did wrong under healthcare reform.  Our state’s economic competitiveness for investment, job growth, and affordability depends on it. 

Dr. Jeffrey S. Gold is Founder & CEO of Gold Direct Care of Salem

Jon B. Hurst is President & CEO of the Retailers Association of Massachusetts