Rate change effective January 1, 2027
Qualified Health Plan (QHP) issuers are required to post justifications for any QHP rate increases to their websites. Below, please find the justification for the rate increase effective January 1, 2027 for the Harvard Pilgrim Health Care Massachusetts Merged Market QHP plans.
Drivers of the rate increase
- Medical Trend: A key driver of health insurance premium increases year-over-year is medical trend, which is comprised of inpatient, outpatient, and physician services. Medical trend includes both increases in the cost of the services provided by hospitals and physician groups and increases in the utilization and severity of these services by our members.
- For 2027, Harvard Pilgrim expects there to be continued upward pressure on medical cost increases, driven by the higher inflationary environment and labor shortages that have led to providers requesting higher rates of reimbursement. While Harvard Pilgrim expects to successfully partner with hospitals and physicians across the state to moderate these cost increases, and continue to make quality care accessible for all, the increases are expected to be above historical levels.
- Harvard Pilgrim also continues to experience elevated medical utilization and severity trends. Utilization has increased across multiple categories of services and is not driven by any single event or service type.
- Pharmacy Trend: Pharmacy spend continues to put significant upward pressure on overall claim trend, particularly for brand drugs such as Immunomodulators, oncology drugs, and other high-cost specialty drugs, and this is expected to continue in 2027.
Massachusetts requires that at least 88% of premium be used for medical expenses (otherwise, a rebate is paid to subscribers). The 2027 rates were calculated to comply with this requirement.
Focus areas for health care affordability
Harvard Pilgrim Health Care is committed to delivering increased access to high-quality care and lowering out of pocket costs for members, wherever possible. To support these objectives, we continue to focus on the following areas:
- Preventive care to keep our health plan members thriving and health care costs lower
- Active management of pharmacy programs, including timely policy changes to control the cost of certain medications, as well as ensure access to effective, alternative therapeutic solutions
- Provider collaboration focused on quality-driven goals and improved health outcomes
- Coordinated support for members with chronic conditions and diseases through our integrated care team
- Better identification of unmet needs and care gaps to drive increased adherence and utilization of preventive care
- Maintaining a focus on reducing fraud, waste, and abuse
- Streamlining internal health plan operations to improve customer and member experience, while increasing overall plan efficiencies
- Frequent review of medical policy, plan designs and coverage policies to deliver equitable access to all health plan members throughout the communities we serve