Health spending in Massachusetts saw a significant increase from 2022 to 2023, reaching 8.6%, according to the Center for Health Information and Analysis. This figure surpasses the 3.6% cost growth benchmark established by policymakers. The National Federation of Independent Business (NFIB) provided testimony at the annual cost growth benchmark hearing, highlighting that premiums continue to rise unsustainably for small employers.
Before the hearing, NFIB surveyed its members about their 2025 premium changes. All respondents reported an average increase of eleven percent. In their comments to policymakers, NFIB emphasized that “annual double-digit premium increases are not sustainable for small businesses.” They noted that as health insurance prices climb, fewer employers can afford coverage for their workers. Other costs such as energy, unemployment insurance taxes, and high labor expenses contribute to making Massachusetts an expensive state for business operations.
The NFIB also released a policy paper titled “Addressing the Health Insurance Affordability Crisis for Small Businesses.” The report presents data indicating a decline in lives covered by small-group insurance plans in Massachusetts and highlights nationwide concerns about employer-provided health coverage sustainability.
Key findings from the report include:
– A sharp decline in small-group market enrollment from 15 million individuals in 2014 to just 8.5 million in 2023, marking a 44% drop.
– Average single plan premiums have increased by 120% over two decades, while family plan premiums rose by 129% for firms with up to 50 employees.
– Only 30% of small businesses currently offer health insurance compared to nearly half in 2000.
– Ninety-eight percent of small businesses express concern about affording health insurance over the next five years.
– Small businesses pay twice as much for health insurance as larger companies; those with less than $600,000 revenue spend nearly 12% of payroll on benefits versus firms with over $2.4 million revenue spending around seven percent.
NFIB asserts it will prioritize addressing health insurance affordability this session because “on the current trajectory,” more employers may either drop coverage or be left with high-deductible plans offering minimal quality benefits.
