The president of the Massachusetts Association of Health Plans (MAHP) says that recent changes in the state’s health insurance laws don’t address one of the main issues, which is the rising costs of health care. Lora Pellegrini says there are other factors that impact health insurance premiums and it’s not just down to the carriers. Pellegrini is advocating for better-planned reforms that take some of the pressure off carriers, which are in some cases operating at a loss in Massachusetts.
Lora Pellegrini advocates for the interests of Massachusetts health insurance carriers
As president of the Massachusetts Association of Health Plans, it’s Lora Pellegrini’s mandate to advocate for the interests of the state’s health insurance companies. The MAHP covers around three million people in Massachusetts and represents 13 health plans. These include Medicaid-managed care organizations and one behavioral health institution.
During a recent podcast, Pellegrini discussed the latest changes in health care legislation and the effects on insurers. She reported that Massachusetts insurers are warning that the system is under severe pressure and a complete breakdown is not out of the question.
Pellegrini pointed out shortcomings in the new laws:
“I think what’s missing in the bills is anything really around affordability and cost containment. I think that is the number one issue facing the Commonwealth.”
Pellegrini says affordability in health care is the priority
Pellegrini proposes that the focus in the future be on affordability in health care. The insurance group leader explained that cost containment measures are too focused on carriers, which are not entirely responsible for high premiums.
Although Pellegrini acknowledged that “good, solid progress” has been made through the latest end-of-season reforms, Massachusetts has some catching up to do with other states that distribute the premiums burden more fairly across all stakeholders.
Changes in insurance laws are also affecting a different state. In the wake of an increased risk of extreme weather in Florida, among other reasons like fraud and litigation, lawmakers have had to adjust policy to reflect changes in the home insurance landscape.
What are the shortcomings in the latest Massachusetts insurance reform bills?
Two health care bills were signed into law by Governor Maura Healey after submission at the last minute during the State of Massachusetts Legislature’s 2023-24 session in January 2024. The laws have these objectives:
- The capping of prescription drugs at a cost of $25
- Expanding access to primary health care
- Increasing the oversight on health care pricing
Pellegrini agrees that these moves are positive, but criticizes the new policies for placing too much focus on health insurance carriers without considering the broader costs, which include hospital fees, administrative expenses, and pharmaceutical expenses.
The MAHP head believes that the burden of cost containment should not lie only with carriers, and the same level of scrutiny should be applied to hospitals, pharmaceutical companies, and pharmacy benefit managers (PBMs). Many companies are experiencing financial losses due to having to spend a lot of money on actual medical services at the same time as medication and hospitalization costs increase.
Pellegrini offered a sobering take:
“So I think much like 2010, you are going to find that while we don’t like the rates – they’re high – they are what are needed to support the underlying costs, which are provider costs and pharmaceutical costs.”
What solutions does Pellegrini have to reduce the burden on carriers?
Lora Pellegrini is by no means against affordability reforms. However, she firmly believes the responsibility for lower premiums should lie with all stakeholders and cost drivers in the health care system. This means that broader reforms must also target the regulation of hospital pricing, pharmaceutical costs, and PBMs.
Pellegrini has also warned about the consequences of placing too much pressure on carriers, who can only do so much to balance low premiums with remaining solvent:
“Today, most of my plans are losing money. They’ve lost money for several quarters. And you could argue, in theory, they’re actually not collecting enough in premiums, which is not a popular message.”
It’s clear that lawmakers in Massachusetts have a lot of work to do to follow through with the positive aims of reforms in the bigger context of all insurance stakeholders. At present, insurance carriers are not in an ideal position of stability, and this could backfire on ordinary citizens in the future.
Policyholders in a different state have another kind of insurance headache to deal with. Californians who suffered massive losses in the LA fires in January 2025 now have to get insurance companies to pay their claims. Some insurers are less inclined to approve claims than others.