Understanding health care affordability
We’re facing one of the most significant affordability challenges in decades, with costs increasing faster than they have in 20 years. As a not-for-profit organization, we’re committed to ensuring our members have access to affordable health care. We’re here to help you understand why costs are rising, what we’re doing to drive change, and how you can get the most from your health plan.
Why health care costs keep rising
We know families are frustrated by the rising cost of health care, including insurance premiums, copays, and other out-of-pocket costs. Understanding these increases can help you feel more confident about making the best choices for your health and your budget.
Providers and hospitals are charging more
We contract with providers and hospitals to be part of our network.
Those in our network agree to offer care at lower, negotiated rates, helping keep costs down for our members.Recently, they’ve been asking for more money.
That’s because their own costs for things like staff salaries and medical equipment have increased.This cost gets passed on to everyone.
When providers and hospitals ask us for higher rates, it increases the overall cost of health care for our members.
We work hard to negotiate rates with providers and hospitals to make
sure all our members have access to high-quality, affordable care.
Prescription medication costs are surging
In fact, they’re at an all-time high. In 2024, there was a $50 billion increase in pharmacy spending, up from $20 billion in 2023.
Here’s why:
No price cap
Unlike other countries, the U.S. doesn’t limit how much drug companies can charge for their products.Expensive research and development
Drug companies spend billions to develop new medicines. This year, they charged consumers an average of 35% more to help cover those costs.Limited competition
Many of the most profitable medications are protected by patents. Without cheaper, generic versions of these medications, drug companies can set prices as they see fit.
We offer flexible prescription drug coverage and resources like our medication lookup tool to help you control your costs.
We all have a part to play
As a not-for-profit organization, we advocate for quality, affordable health care for all.
Read about how our CEO, Sarah Iselin, envisions building a more affordable health care system here.
How your monthly premium dollars are spent
Your premium is the monthly amount you pay to maintain your health insurance, and we believe you have the right to know where that money goes.
As a not-for-profit health plan, our responsibility is to our members, not shareholders. That means we don’t distribute any of our profits to shareholders, unlike for-profit health plans. Instead, we put the majority of your premium dollar toward covering your care.
Here’s how your premium dollar breaks down:
- 90¢ goes directly to your medical and pharmacy coverage for hospital and provider services, prescription medications, and more.
- 10¢ supports administrative costs, including taxes, employee pay and benefits, and technology.
We’re committed to making every premium dollar work harder for members each year so more of it goes toward your care, helping to lower your out-of-pocket costs and ensure you get the most value from your coverage.
Learn more about how we manage premiums and expenses in our impact report.
*Illustrative for typical year
Smart ways to manage your health care costs
Taking smart steps can make a big difference in what you pay for care. Here are some simple things you can do to make the most of your benefits and stay on top of your health care costs.
Choose in-network providers
Staying in-network is the easiest way to be sure your care is covered.
Partner with your provider
Discuss your care options with your provider before any procedures are scheduled or referrals are made. Then confirm coverage with your insurance or your provider’s office to ensure you get the right care without unexpected bills.
Know before you go
Checking the cost for tests and procedures in advance helps protect you from surprise bills — a powerful step toward managing your costs.
Compare your options
Shopping around for scheduled care like lab work, imaging, physical therapy, and outpatient surgery can help you find the right fit for your budget.
Sign in to MyBlue, your online member account, to find in-network providers and estimate your costs.
Our commitment to health care affordability
As a not-for-profit health plan, our founding mission was to help members afford the rising cost of health care, and it’s still a priority today. Our team, which includes clinicians, works across the health care system every day to drive change that will help lower your costs.
One of the biggest ways we work to protect you from rising health care costs is by negotiating fair prices with our in-network providers and hospitals.
What we do: We negotiate with in-network providers and hospitals to agree on lower rates for their services, which is why you pay less when you stay in-network.
Why it matters for you: When we push back on providers and hospitals asking for higher-than-necessary price increases, you’re protected from having to pay more than you should.
Setting a higher standard: We don’t make a profit from your premiums. Every dollar we save in these negotiations goes back into keeping your coverage strong and your costs as low as possible, or is donated to community nonprofits. While our only focus is on our members, for-profit insurers balance negotiating lower rates with making money for shareholders.
We know how important prescription medications are for your health, and how stressful it can be when prices rise, as they have been. As a not-for-profit health plan, our goal is to make sure the medicines you rely on are as affordable as possible.
What we do: We continuously work to make prescriptions more affordable by collaborating with other Blue plans to leverage combined purchasing power when negotiating with drug companies for lower prices, offering cost-saving alternatives like safe and effective generics and biosimilars, partnering with providers to identify lower cost options, and supporting legislative efforts that promote fairness and access.
Why it matters: These efforts make a real difference in helping you spend less at the pharmacy, stay on your medications, and get the treatments you need without extra financial strain.
Setting a higher standard: By continuously improving how we manage prescription costs, we’re setting a standard for affordability that includes short-term savings and delivers lasting value and a better experience for every member.
Keeping health care costs as low as possible is also about making sure your premium dollars are used wisely. That’s why we have a dedicated team working to detect and prevent fraud, waste, and abuse in the system.
What we do: Using advanced methods with the help of AI, our team analyzes claims, flags unusual patterns, and investigates potential fraud and waste before it becomes an issue.
Why it matters for you: Preventing fraud and waste helps ensure resources go toward covering care for our members and keeps your premiums and out-of pocket costs lower.
Setting a higher standard: As a not-for-profit, any money we save is put back into the care and services that matter most for you and your family.
We introduced a new national standard for how health plans can partner with providers to improve patient outcomes and lower health care costs. It’s called the Alternative Quality Contract (AQC).
What we do: Our AQC holds providers accountable for the cost, efficiency, and quality of your care.
Why it matters for you: Our AQC encourages providers to coordinate your care and avoid unnecessary tests and procedures, so you only pay for the care you really need.
Setting a higher standard: Since 2009, our AQC has served as a blueprint for other health plans serving millions of Americans across the country. Today, more than 80% of Massachusetts providers and hospitals take part in our AQC.