Dive Brief:
- Health plans operating in Massachusetts recently warned that health costs for businesses will probably go up between 5% and 8%.
- The insurers' predictions are higher than the states' target of 3.6% medical cost increases.
- Health plans say that the two numbers are like "apples and oranges," and that insurers could meet the medical spending cap and still face pricing pressures that drive up benefit costs.
Dive Insight:
Attempting to control health plan spending increases at the state level may have some benefits, but without a law in place to force the matter, it's unlikely insurers will feel at all bound to meet these goals. Controlling benefit cost increases will be nearly impossible until we have more cost transparency across the board. Once employers have a good idea of what providers are charging, they're more able to work collaboratively with health plans to establish reasonable pay schedules that don't rocket upward year-over-year.