Health insurance costs in Massachusetts are spiraling out of control, and families like the Modigs are feeling the squeeze. Imagine cutting back on everything—vacations, new cars, even new shoes for the kids—just to keep up with skyrocketing premiums and out-of-pocket expenses. Modig, like many others, knows her insurance costs will rise again next year, but by how much remains a looming question until spring. Last year alone, her out-of-pocket maximum jumped by $1,000 to $4,000, forcing her family to tighten their budget even further.
“You start questioning everything,” Modig reflects. “Can those shoes last another season? Does last year’s coat still fit the kids?” These aren’t just minor inconveniences—they’re symptoms of a growing affordability crisis that’s gripping the state. And this is the part most people miss: it’s not just about premiums; it’s about the entire financial strain on families, businesses, and the state’s economy.
The rising cost of health insurance has become a top concern for households across Massachusetts, especially during open enrollment periods when families reassess their budgets. Employers’ premiums have surged by 10 percent or more, according to insurers and brokers, at a time when overall healthcare costs are already on the rise. But here’s where it gets controversial: while some argue that these increases are necessary to cover rising medical expenses, others question whether the system is fundamentally broken, pushing costs onto consumers without addressing the root causes of high healthcare prices.
David Shore, executive vice president at Borislow Insurance, paints a grim picture: “This is the hardest health insurance market I’ve seen in two decades, with no end in sight. It’s only going to get worse.” His words echo the sentiments of many experts who warn that these costs are exacerbating an affordability crisis for residents and businesses alike. Massachusetts already has among the highest employer healthcare costs in the nation, and the situation is worsening.
Here’s a startling fact: Massachusetts families spent an average of $28,151 on employer-based health insurance last year, compared to the national average of $24,540. And that’s just premiums. When you factor in co-pays, deductibles, and other out-of-pocket costs, the average annual healthcare expense for a Massachusetts family soared to $32,469 in 2024. These costs are outpacing household income growth, inflation, and other economic indicators, making the state increasingly unaffordable to live in.
Small businesses are particularly hard-hit. Jon Hurst, president of the Retailers Association of Massachusetts, warns, “We’re at a breaking point.” A February study by the UMass Donahue Institute revealed that about half of small businesses in the state predict they’ll have to sell or close within five years due to skyrocketing healthcare and energy costs. Is this the new normal, or is there a better way to manage these expenses?
For employers, premium increases depend on factors like company size, healthcare usage, and how insurance is purchased. Less than half of Massachusetts employers are “fully insured,” meaning the insurer bears the financial risk. Among these, smaller businesses with 50 to 100 employees are seeing staggering premium hikes of 10 to 30 percent. Larger employers fare slightly better but still face significant increases. Meanwhile, most Massachusetts employers are “self-insured,” paying claims directly, and even they are seeing premiums rise by low single to low double digits.
Mark Gaunya of Borislow Insurance sums it up: “I haven’t seen rate increases like this in a long, long time. The market is really, really hard right now for a lot of people.” The state’s largest insurers, like Blue Cross Blue Shield of Massachusetts and Point32Health, report similar trends, with some employers facing 20 percent or higher premium increases.
To cope, employers are shifting more costs onto employees through higher co-pays, deductibles, and premiums. But is this fair? Nearly half of Massachusetts residents with commercial insurance had high-deductible plans in 2023, up from just 19 percent in 2014. Average deductibles have also risen sharply, from $2,300 in 2014 to over $3,100 in 2023. While these strategies help employers mitigate costs, they place a heavier burden on workers.
Take Joe D’Eramo, a 61-year-old freelance copy editor and Uber driver from Millis. His monthly premium is set to increase by $90, and his deductible will jump by $500 to $3,500 starting January 1. With a recent diabetes diagnosis, D’Eramo is counting down the years until he qualifies for Medicare. “I just want to be able to make it to that [while still] healthy,” he says. His story is a stark reminder of the human cost behind these numbers.
Here’s the bigger question: As healthcare costs continue to rise, what can be done to make insurance more affordable without sacrificing quality care? Is the current system sustainable, or do we need a fundamental overhaul? Share your thoughts in the comments—let’s start a conversation that could shape the future of healthcare in Massachusetts.