Press Release  NEW DATA HIGHLIGHT CONTINUED HEALTH CARE AFFORDABILITY CHALLENGES FOR MASSACHUSETTS RESIDENTS

BOSTON — Today, the Massachusetts Health Policy Commission (HPC) shared new data on health care spending in Massachusetts in 2019 and an early look at national trends in 2020. The data was presented at the 2021 Hearing on the Potential Modification of the Health Care Cost Growth Benchmark to provide insight into spending performance in the Massachusetts’ health care system. The annual hearing considers available data, information, and testimony regarding whether modification of the Health Care Cost Growth Benchmark is appropriate.

“Massachusetts has made progress in tempering the overall growth in health care costs since the benchmark was first established in 2012,” said Stuart Altman, HPC Chair. “Since then, the state’s annual health care spending growth has averaged just below 3.6% and has been lower than comparable national trends. However, the annual report released today by CHIA shows that health care spending accelerated in the years prior to the COVID-19 pandemic, exceeding the state’s cost growth benchmark in 2018 and 2019. This is a concerning trend that, combined with signs of price growth at the end of 2020, threatens to erode the gains we have made and further challenge the families and employers who already struggle to afford the high cost of health care in Massachusetts.

“The COVID-19 pandemic has had an unprecedented impact on the state health care system and its workforce in 2020, dynamics which the HPC continues to examine,” added the Chairman. “Later this spring, the HPC will release the first results of its COVID-19 Impact Study on the short-term and long-term care delivery and financial ramifications of the pandemic in Massachusetts. We applaud the incredible work and determination of our health care system to provide excellent patient care throughout the pandemic and ongoing efforts to administer vaccines. As the system continues to recover, however, we must double down and refocus on our affordability, equity, and cost containment goals as a state.”

Key Findings:

Between 2012 and 2019, annual health care spending growth in Massachusetts averaged 3.59%, a rate 0.6% slower per year than the rest of the U.S. Other findings include:

• Growth in total health care spending in Massachusetts accelerated in the past two years and exceeded the benchmark in 2018 and 2019. Spending growth per member was at or over the benchmark in all market segments in 2019, including commercial, MassHealth, and Medicare. Commercial spending was driven primarily by hospital outpatient services (7.6% per person) and physician and other professional services (6.1%), while Medicare growth was driven by hospital outpatient services and prescription drugs, with both growing at nearly twice the national rate.
• Health insurance premiums for Massachusetts families are above the national average. Health care spending for an average Massachusetts family in 2020 was approximately $2,242 per month including both out of pocket spending and employer and employee premium payments. Individuals with high deductible plans, now more than a third of Massachusetts commercially-insured residents, face significant challenges affording the high cost of health care. Those residents are twice as likely to have gone without needed care or prescriptions due to high cost.
• National spending on health care dropped significantly in April 2020, due to the COVID-19 pandemic, with some categories of care still not reaching pre-pandemic levels. Overall health care spending in 2020 was lower than 2019, but this was because of drastic reductions in use of care as prices for physician and hospital care accelerated relative to prior years.

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