Health insurance rates rising faster for small businesses
Health insurance premiums for Massachusetts’ small businesses and individuals covered by Harvard Pilgrim Health Care will rise by double digits over the next six months, nearly twice the pace of last year.
Those are among the higher rate increases announced Wednesday by the Massachusetts Division of Insurance for small businesses and individual customers of the state’s health insurers.
On average, small businesses will see their rates rise 8.2 percent for plans that renew Oct. 1. Those plans affect 106,426 people who work for companies with fewer than 50 employees. Roughly half those members are covered by Blue Cross Blue Shield’s HMO Blue plan, where rates will rise 4.6 percent on Oct. 1, compared with 8 percent a year ago.
The Harvard Pilgrim HMO plan, which has around 30,000 members, is going up 14.2 percent, the state said. Rates for Neighborhood Health Plan coverage are scheduled to increase by nearly 18 percent.
Premiums are rising generally as a result of higher drug costs and hospital costs, according to Chris Goetcheus, a spokesman for the Insurance Division. In addition, plans with healthier populations have to make payments of tens of millions of dollars to those with less healthy members under the federal Affordable Care Act, he said.
“It’s quite burdensome,’’ Goetcheus said.
The state also announced new rates for 2017 for individuals who sign up for health plans. Those rates are slated to rise 6.7 percent on average across 16 plans, affecting an estimated 268,000 people. Rates for Harvard Pilgrim customers will rise 15 percent, and for Neighborhood Health Plan members nearly 19 percent.
Open enrollment for individuals who buy coverage through the state-run Connector program starts Nov. 1.
Wellesley-based Harvard Pilgrim on Monday reported a net loss of $34.2 million for the first six months of 2016 on revenue of $1.6 billion.
In a statement, the company’s chief financial officer, Charley Goheen, cited concerns about rising pharmaceutical costs and the Affordable Care Act.
Hartford-based Aetna this week said it would drop out of the insurance exchanges in a number of states because it was unprofitable. The company is not part of the Massachusetts exchange.