Weight loss drugs are raising insurance costs in Mass.

By Alison Kuznitz, State House News Service
BOSTON – As the state health insurance marketplace prepares for open enrollment in November, officials say the steep cost of popular weight-loss drugs has fueled higher premiums.
Increased provider rates also contributed to the rise in insurance premiums impacting the Massachusetts Health Connector, which offers health and dental coverage for individuals, families and businesses through carriers including Blue Cross Blue Shield of Massachusetts, UnitedHealthcare and Mass General Brigham.
For 2025’s open enrollment period, average merged markets rates — calculated across qualified health plans for individuals and small employers — increased by 7.9 percent before adjusting for age, said Kristopher Harackiewicz, senior director of plan management and carrier relations at the Connector. That uptick, which was approved by the Division of Insurance for medical plans, exceeds last year’s increase of 3.2 percent, he said.
“Massachusetts is not alone in seeing these higher rate increases for plan year 2025,” Harackiewicz told the Health Connector Board, which approved the carrier plans Thursday. “Data from nearby states show increases for plan year 2025 ranging anywhere from 7 to 18 percent, with Massachusetts seeing actually slighter lower than the average increases, versus states such as Rhode Island, who’s looking at anywhere from 7.8 up to 12 percent increases in their small group markets. Maine, looking at up to 9.4 increases, and Vermont actually looking at 18 percent increases, as well.”
Weight-loss drugs like Ozempic and Wegovy are partly driving the rate increases, Harackiewicz said.
Demand for the Glucagon-like peptide 1 (GLP-1) drugs has soared among Bay Staters, with more than 310,000 prescriptions filled among commercially-insured residents last year, the Health Policy Commission said in a recent analysis. Regulators expected total gross commercial spending on the drugs to exceed $270 million in 2023, compared to $125 million in 2022.
“Different carriers are considering different ways to address some of those high costs that are being driven by these GLP-1 drugs,” Harackiewicz said. “I think actually there’s probably an opportunity there, right, for us to have a more broad-based discussion about what the right solutions are, especially for the Health Connector population.”
Lora Pellegrini, CEO of the Massachusetts Association of Health Plans, attributed the higher premiums to the costs for inpatient and outpatient hospital-based care, physician services and prescription drugs. Those factors, she said, are “challenging health plans’ ability to constrain rates.”
“This year’s average premium increase of 7.9% accounts for demands for double digit reimbursement rate increases from hospitals and providers that have been emboldened to ignore our state’s health care cost growth benchmark and continued outsized increases in prescription drug prices,” Pellegrini said in a statement. “Anticipated costs for medical and pharmacy claims in 2025 account for 91% of plans’ premium increases, driven in part by the high cost and utilization of GLP-1 drugs, well above the 88% medical loss ratio threshold set in state and federal law. And unlike health plans, whose rates are reviewed by regulators, providers including hospitals and pharmaceutical companies have no such oversight and are free to set prices as they see fit.”
State insurance officials are speaking with insurance carriers about how to handle the GLP-1 drugs, including potentially changing their availability, said Rebecca Butler, counsel at DOI.
“The division is working with the carriers because it should be remembered that these drugs have a lot of medical benefits beyond weight loss — they have [benefits related to] blood pressure, heart, kidney, addiction, polycystic ovarian disease,” Butler told the Connector board.
She added, “At this point in time, it is unfortunate to have these kinds of rate increases, but I think that we have to remember that across the country, there are millions of people that are on these drugs and have experienced a lot of benefits that no one ever contemplated beyond weight loss earlier.”
Matthew Veno, executive director of the Massachusetts Group Insurance Commission, urged his Connector Board colleagues to also focus on provider reimbursements, which he described as the “biggest driver” for rising premiums.
“I’m sure the carriers, were they here, would echo what we see and we hear from our vendor carriers, that there’s been a pretty significant, if not dramatic shift in the marketplace, where providers are demanding extremely large increases over short periods of time,” Veno said. He added, “It deserves, I think, a moment of emphasis, a moment of urgency because we’re into a new space and a new level of challenge on this topic.”
Open enrollment kicks off Nov. 1 at the Health Connector.
Regulators also voted to approve plans offered through WellSense and Harvard Pilgrim Health Care as options for individuals and families. Those carriers lost their national accreditation, which is required for marketplace plans, earlier this year but are working to resolve administrative issues, Connector officials said.
“Neither this process nor the issues that led to the loss of accreditation have impacted members,” Audrey Morse Gasteier, the Connector’s executive director, said. “And further in our review, we have determined that removing these carriers from the 2025 product shelf would create significant negative impacts for the over 100,000 enrollees in their plans with respect to re-enrollments for next year.”