Harvard Pilgrim Health Care
Rate Justification for Massachusetts Merged Market Plans
Rate Change Effective January 1, 2024
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, 2024 for the Harvard Pilgrim Health Care Massachusetts Merged Market QHP plans.
Drivers of the rate increase
The average first quarter 2024 rate change for Harvard Pilgrim Health Care (Harvard Pilgrim) renewing members in the Massachusetts Merged Market is a rate increase of 7.0%.
- Trend: A key driver of health insurance premium increases year-over-year is medical trend, which is comprised of inpatient, outpatient, and physician services as well as pharmacy costs. Medical trend includes both increases in the cost of the services provided by hospitals and physician groups and increases in the utilization of these services by our members. In particular, for 2024, Harvard Pilgrim expects upward pressure on medical unit cost increases, driven primarily by the higher inflationary environment. While Harvard Pilgrim expects to successfully manage these unit cost increases, they are expected to be above recent levels. Additionally, pharmacy trends continue to put upward pressure on overall claim trend, and this is expected to continue in 2024.
- Risk adjustment: Harvard Pilgrim expects its risk adjustment results to be less favorable in 2024. This is largely driven by the expected migration of members from MassHealth to the Merged Market due to redetermination.
- Contribution to Surplus: Harvard Pilgrim includes a surplus of 1.4% in order to maintain financial stability and ensure that Harvard Pilgrim can continue to pay claims and invest in its members, despite the significant uncertainty that is present in the market and healthcare industry.
Rate changes vary by plan and by account based on age composition and rating area.
Massachusetts requires that at least 88% of premium must be used for medical expenses (otherwise, a rebate is paid to subscribers). This rate increase is calculated to comply with this requirement.
Harvard Pilgrim’s strategy to keep premiums affordable
Harvard Pilgrim Health Care is committed to improving quality and delivering increased value across the health care system. Today, we are focused in the following areas to support these strategic objectives:
- Establishing collaborative arrangements with health care providers to control costs and improve health outcomes
- Negotiating pharmacy contracts aligning payments with outcomes
- Managing chronic conditions and diseases through our nurse care managers
- Updating our payment policies to deter inappropriate payment for services on selected medical infusible drug claims
- Maintaining focus on reducing fraud waste and abuse
We remain committed to identifying opportunities to lower health care costs while providing enhanced value to our customers and health plan members today, and in the future.