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Health Care Affordability

As health care spending in Massachusetts continues to outpace growth in the overall economy, individuals, families, and businesses face increasing affordability challenges. Health care affordability is especially burdensome for those with lower incomes and can lead to avoidance of necessary care and medical debt, with widening disparities in health outcomes based on race, ethnicity, and other societal factors. High health care costs also make it difficult to meet other basic needs like housing, food, transportation, and childcare.

image of a hospital with a price tagAccording to HPC findings, these  costs are primarily driven by high and increasing prices for some health care providers and for pharmaceuticals, with administrative spending and use of high-cost settings of care as additional drivers. Massachusetts employers of all sizes, but particularly small businesses, are confronting ever-rising insurance premiums by shifting costs to employees through high deductible health plans. As a result, many employees are increasingly at risk of medical debt, relying on state Medicaid coverage, or are becoming uninsured, an alarming signal of the challenges facing a core sector of the state’s economy.

icon of a column chart with a line graph over itIn 2012, Massachusetts passed a landmark health care reform into law, including establishing a first-in-the-nation “benchmark” or target for a sustainable rate of health care cost growth. The benchmark has become an important tool to help moderate total spending growth and ease the burden of health care costs on government, households, and businesses in Massachusetts. Since the enactment of the benchmark, health care spending by public and private health care payers has moderated. However, health insurance premiums and cost-sharing by individuals and families have frequently increased in excess of the benchmark. If health care spending grew at the benchmark rate of 3.6 percent – rather than the current trajectory of 5.8 percent – family premiums and out of pocket spending would be 14% lower, with nearly 13,000 dollars more in take-home pay per worker in Massachusetts by year 2030. Learn more about the annual process to set the benchmark.