Massachusetts families no longer have the most expensive health insurance premiums in the country, according to a report being released by The Commonwealth Fund today. After holding the unenviable top spot in 2008 and 2009, Massachusetts fell to number nine, behind Connecticut, New Hampshire, Rhode Island, Washington, D.C., and four other states.
Analysts say it is too soon to tell whether the report reflects a one-year blip in the data or lasting success in controlling the growth of health insurance costs through market changes and government regulation.
“I think it’s a good story for the state,’’ said Cathy Schoen, senior vice president of The Commonwealth Fund and senior author of the report. “We will keep tracking it.’’
The report from The Commonwealth Fund, a private US foundation that seeks to promote a high-performing health care system, used data from a federal survey of employers, calculating the average premiums for private group health insurance plans, including what the employer and employees pay. The Massachusetts average was $14,606 in 2010, down slightly from the prior year. But that figure is 48 percent higher than the 2003 average of $9,867.
Even if Massachusetts is improving, “health care premiums are still growing at a faster rate than our economy, and they’re growing at a faster rate than our wages, and that’s a problem,’’ said Sarah Iselin, president of the Blue Cross Blue Shield of Massachusetts Foundation. “That’s true whether we’re number one, number nine, or number 50.’’
And that’s true across the country. In 2003, the report showed, health insurance premiums exceeded 20 percent of median household income for people under age 65 in just one state: West Virginia. Last year, that was the case in 23 states.
In Massachusetts, premiums accounted for about 16 percent of 2010 median household income.
The ranking does not fully account for the quality of plans offered in each state, including how much of the cost of care may be shifted from the total premiums paid upfront to copayments or other out-of-pocket costs incurred later. It does add to a dizzying mix of health cost indicators released in recent months.
An employer survey conducted by the Kaiser Family Foundation and the Health Research & Education Trust and released in September showed that the average cost of family plans in the United States rose dramatically in 2011, jumping 9 percent compared with a 3 percent increase in 2010. Then, the Obama administration announced last month that the increase in Medicare premiums would be less than expected next year.
“We’re in this unsettled period where there are varied and contradictory indicators out there giving good news and bad news at the same time,’’ said John McDonough, professor of practice at Harvard School of Public Health.
It is important to watch the indicators but to avoid assumptions just yet, he said.
McDonough said it is possible that Massachusetts is experiencing a local “Hillary effect,’’ reminiscent of when the US health industry responded with self-regulation to threats by Hillary Clinton, wife of then-president Clinton, of government regulation.
The Legislature passed a cost-control measure last year that pushed insurers to offer lower-cost plans that included limits on which doctors consumers could see. The Legislature is also now drafting a more expansive plan that could include a complete reworking of how health care providers are paid, aimed at prioritizing preventive care and eliminating unnecessary tests and treatments.
“Our strategies to contain health care premiums in the Commonwealth are working, but there is more to do,’’ Governor Deval Patrick said in an e-mailed statement, responding to the Commonwealth Fund ranking. “That is why our cost containment bill needs action in the Legislature. People and small businesses across the state cannot wait any longer.’’
Schoen said she thinks that the improved Massachusetts ranking could be due in part to the state’s online health insurance exchange, created in 2006 as a place for individuals and small businesses to compare plans and, for some, to access state subsidies. The exchange made the entire insurance market more efficient by lowering administrative costs for insurers and hospital costs of caring for those who were previously uninsured, she said.
“I think Massachusetts has the advantage that it acted early on insurance and is now really focused on the cost of care, and the focus is systemwide,’’ she said. “People are at the table talking.’’