BOSTON — Thursday, December 11, 2025 — Today, the Massachusetts Health Policy Commission (HPC) released its 2025 Health Care Cost Trends Report and comprehensive policy recommendations as well as an interactive data overview on rising out-of-pocket spending.
The issuance of this report takes place amid ongoing federal action that is creating uncertainties within the health care landscape in Massachusetts and exacerbating the existing affordability hardships facing the Commonwealth’s residents. Amid ongoing threats to coverage and access, health care costs continue to grow.
As reported by the Massachusetts Center for Health Information and Analysis (CHIA), total annual health care expenditures per Massachusetts resident grew 8.6% in 2023, from $10,264 to more than $11,153. This 8.6% growth in spending significantly exceeded the health care cost growth benchmark of 3.6% set by the HPC, and was the highest recorded since measurement against the benchmark began in 2012 – with the exception of 2021, where spending growth reflected a “bounce back” in the use of care following depressed utilization during the height of the COVID-19 pandemic in 2020.
Massachusetts now has the highest family health insurance premiums in the country. In 2024, the average annual cost of health care for a family exceeded $31,000, including premiums and out-of-pocket spending. The report found that annual out-of-pocket health care spending per resident grew from $849 in 2019 to $1,049 in 2023 (a 29% increase) with more than 125,000 residents paying at least $5,000 out-of-pocket for health care, twice as many as did in 2019. As health care spending grows as a portion of household income, more and more families incur medical debt and avoid using needed care.
One in eight Massachusetts residents has medical debt, a burden disproportionately borne by Black residents and those with low-incomes. The most common sources of bills leading to medical debt were copays or coinsurance (64.7%) and high deductibles (71.5%), which residents and businesses increasingly adopt to limit premium increases.
“We need a commitment to urgent action, as our residents face federal policy changes jeopardizing health care access and coverage alongside unprecedented health care cost growth. The Commonwealth has a proud history of taking bold action to address complex health care challenges through a model of collaboration and collective action, most recently demonstrated in the state’s response to the Steward Healthcare crisis and the COVID-19 pandemic,” said HPC Executive Director David Seltz. “Massachusetts should once again come together in a spirit of shared responsibility and sacrifice for the greater public good, and be the national leader in reimagining our health care system to one capable of delivering affordable, accessible, and equitable care for all residents – and that reform must begin with a recommitment to the health care cost growth benchmark.”
2025 HEALTH CARE COST TRENDS REPORT – POLICY RECOMMENDATIONS
In 2026, policymakers and health care leaders should recommit to the health care cost growth benchmark and convene to develop a consensus on a comprehensive set of reforms, consistent with the long-standing Massachusetts values of shared responsibility and shared sacrifice, for a greater public good. Massachusetts should once again be the national leader in reimagining our health care system from the status quo to one capable of delivering affordable, accessible, and equitable care for all residents.
In addition to this, the HPC has outlined policy recommendations to improve health care affordability by addressing known drivers of health care costs, including:
1. Administrative Complexity
Within Massachusetts and nationally, there is significant administrative complexity in health care that adds costs without improving value or accessibility of care. The Commonwealth should take action to dramatically reduce these costs by adopting policies that reduce, standardize, centralize, and/or automate common administrative tasks, prioritizing those that impede care for patients and burden primary care clinicians and support staff (e.g., prior authorization).
2. Health Care Prices
Prices continue to be a primary driver of health care spending growth in Massachusetts and there is persistent, significant variation in prices between Massachusetts providers for the same sets of services without commensurate differences in quality. Many states are implementing policy solutions that seek to limit excessive prices for services above a fair, reasonable threshold or to moderate price growth to a sustainable rate. The Commonwealth should consider these approaches and others to address excessive prices for which competitive forces have failed to meaningfully constrain prices.
3. Pharmaceutical Spending
Net of rebates, pharmacy spending per enrollee grew an average of 8.6% per year from 2019 to 2023, contributing significantly to the state’s overall health care cost growth rate. Recent legislative action established new tools for enhancing the transparency and oversight of pharmaceutical manufacturers and pharmacy benefit managers (PBMs), including through the HPC’s new Office of Pharmaceutical Policy and Analysis (OPPA) and the Division of Insurance (DOI). In addition to considering policies implemented by other states, the Commonwealth should consider recommendations developed in the coming year by OPPA and DOI.
4. Low-Value Care and Avoidable Utilization
The Commonwealth should encourage providers and payers to adopt strategies to reduce low value care and avoidable emergency department (ED) use, ED boarding, and readmissions, and shift lower acuity care to the most appropriate setting. Fundamental to the success of these efforts is to expand access to primary care and behavioral health care. The Commonwealth should take immediate action on the recommendations of the Primary Care Task Force. In addition to primary care, there should be continued support and investment in the broader Massachusetts health care workforce, which continues to experience disruption, with turnover and shortages of providers in many roles throughout the care continuum, especially in behavioral health care and long-term care.
2025 HEALTH CARE COST TRENDS REPORT – KEY FINDINGS
Rising Prices and Variation:
- As in prior years, commercial spending growth was mostly driven by higher prices for care. However, unlike the past several years, use of more, and more expensive care also increased in 2023 leading to historically high spending growth.
- By category of care, hospital outpatient department (11% growth) and prescription drug spending (8.6% growth) continued to drive commercial spending growth more than other categories.
- Hospital outpatient department spending growth was particularly driven by higher prices and wider usage of administered drugs such as Keytruda, and higher volume of surgeries such as cardiac ablation which was paid between $29,000 and $75,000 per procedure.
- Prescription drug spending growth was driven by a near-doubling in use of GLP-1 drugs (accounting for more than a third of prescription drug spending growth in 2023) and growth in spending on immunosuppressants such as Humira which, by themselves, accounted for more than a third of commercial drug spending in 2023 (net of rebates) and exceeded all spending on primary care.
- Payment for an inpatient hospital stay rose 30% from 2019 to 2023 with variation in prices for the same stay ranging from $13,900 to $28,300. Prices for administering the same dose of the same drug (Keytruda) varied from under $11,000 to more than $22,000 by hospital.
Out-of-pocket Health Care Spending:
- From 2019 to 2023, average annual out-of-pocket spending per member with commercial coverage grew from $849 to $1,094. More than two-thirds of this increase was due to an increase in deductible spending, which rose from $458 to $633 per year. The growth in deductibles means that the composition of cost sharing is increasingly shifting from copays to the type of out-of-pocket spending that is most unpredictable for patients.
- Inpatient care is generally the setting that can produce the largest bills for patients. While roughly a quarter of stays had no cost sharing, about 10% of stays had cost sharing of $3,000 or more. However, ambulatory care services were responsible for the most total annual cost sharing per member, since they are commonly used by many patients, including $257 for E&M visits, $150 for imaging, and $117 for lab tests.
- Although the ACA mandates that certain preventive services should be provided without cost sharing, the HPC found that for a set of ACA-covered preventive services, patients were charged cost sharing a significant minority of the time. The prevalence of cost sharing varied widely by service, ranging from 0.1% of oral contraception prescriptions to 30% of preventive visit episodes in 2023.
Explore out-of-pocket spending analysis further in the latest interactive DataPoints issue, “Examining the True Costs of Care: Patient Cost Sharing in Massachusetts.”
Primary Care:
- From 2019 to 2023, primary care spending grew 13.6% ($67 per person per year). Behavioral health spending grew 56.7% ($228) and other medical spending excluding prescription drugs grew 20.6% ($840), leaving primary care with a shrinking share of health care spending.
- 30% of adults living in the lowest income communities of the state had no primary care visits in 2023, compared to 20% of adults in the highest income areas. A similar pattern was present for children (11% versus 4%).
Hospitals and Providers:
- The number of statewide emergency department (ED) visits has remained steady from 2022 to 2024 with roughly 315 visits per 1,000 residents, while about 40% of ED visits are potentially avoidable.
- Roughly 30% of behavioral health ED patients continue to board in the ED, with visits exceeding 12 hours.
- Massachusetts Medicare beneficiaries had the highest rate of hospitalization, the second highest rate of having a preventable hospital visit and the highest likelihood of being admitted to a hospital stay after an ED visit across all 50 states.
- Hospitals were typically paid much more than physician offices or other sites for the same services; the average amount paid for a colonoscopy with removal of lesions was $2,530 when the procedure occurred in a hospital outpatient department versus $960 when provided in a physician office and $880 when provided in an ambulatory surgery center.
The full 2025 Health Care Cost Trends Report, policy recommendations, chartpack, and DataPoints issue, “Examining the True Costs of Care: Patient Cost Sharing in Massachusetts,” are available on the HPC’s website. A recording of the board meeting and all presentation materials are also available on the HPC’s website.
