Why It Matters
Massachusetts small businesses face a second consecutive year of double-digit health insurance premium increases. Insurers have requested average rate hikes of nearly 13 percent for 2027 in the state’s merged market, which covers roughly 700,000 members employed by small businesses and individual purchasers. The proposals arrive as state officials confront broader economic pressures and employers warn they cannot sustain rising coverage costs.
What Happened
The state Division of Insurance released filings late Friday showing that health insurers want to raise premiums by an average of 12.9 percent next year in the merged market. Blue Cross Blue Shield of Massachusetts, the largest insurer in the segment, requested a 15.3 percent increase. Boston Medical Center Health Plan and Tufts Health Public Plans sought hikes of approximately 12 percent. Fallon Community Health Plan proposed the steepest jump at 25 percent for its nearly 30,000 enrollees. Harvard Pilgrim Health Care submitted the smallest request at 6.7 percent.
Last year, insurers initially sought average merged market increases of 13.4 percent. State regulators negotiated that figure down to 11.5 percent through a multi-month review process. The 2026 hike was roughly four times larger than the increase approved for 2024.
Eileen McAnneny, president of the Employer Coalition on Health, said in a statement that employers are at a breaking point. Jon Hurst, president of the Retailers Association of Massachusetts, said the new proposals would push many small businesses above fifty thousand dollars in annual premiums for a single family’s coverage unless they shift to high-deductible plans.
By the Numbers
The merged market covers nearly 700,000 members in Massachusetts. Average family health insurance premiums in the state rose from approximately seven thousand three hundred dollars in 2000 to twenty-eight thousand one hundred fifty dollars in 2024, according to the state Health Policy Commission. Premium growth continues to outpace the national average. All proposed increases for 2027 exceed the current rate of inflation. The requests range from 6.7 percent to 25 percent depending on the insurer.
Zoom Out
Rising health insurance costs have become a central political issue in Massachusetts ahead of the 2026 election cycle. Governor Maura Healey, who is running for reelection, has referenced the state’s high cost of living nearly daily on the campaign trail. Republican challengers have made affordability a primary attack line. Last year, Healey called the merged market rate proposals unsustainable and urged lawmakers to take stronger action on health care costs.
The Massachusetts Association of Health Plans attributed the rate requests to higher underlying costs, including increased utilization of expensive care settings and rising prescription drug prices. Several major insurers reported financial losses in recent years, though some posted improved results in early 2026.
What’s Next
The rate review process will stretch several months and typically involves negotiations between insurers and state regulators. Final approved rates are expected before the start of the 2027 coverage year. Lawmakers and the governor face mounting pressure from business groups to address health care cost drivers, though no major legislative proposals have advanced this session.