Mass. Commission Keeps Healthcare Cost Growth Benchmark at 3.6%

Massachusetts has led the nation in trying to curb total healthcare spending at the state level. The Massachusetts Health Policy Commission (HPC) Board has set the healthcare cost growth benchmark for calendar year 2027 at 3.6%. 

Total healthcare expenditures (THCE), the annual sum of all healthcare expenditures in the Commonwealth from both private and public sources, calculated on a per-person basis, increased 5.7% from 2023 to 2024, totaling $11,663 in average annual healthcare spending per Massachusetts resident.
For the fifth consecutive year, pharmacy spending net of rebates was a major driver of cost growth, increasing by $1.1 billion from the previous year – a nearly 10% increase. 

Considering these concerning healthcare cost growth trends, commissioners voted to maintain the benchmark at its current rate of 3.6% for another year.
The healthcare cost growth benchmark, the cornerstone for the state’s cost containment efforts, is a statewide target for the rate of growth of total healthcare expenditures. The benchmark does not cap prices or spending growth; it is a measurable goal to track the state’s progress and to motivate collective action to moderate spending growth over time.

In a recent meeting of stakeholders, HPC Executive Director David Seltz acknowledged that this is the fourth consecutive year of over-benchmark spending and the data demonstrates that healthcare affordability in the Commonwealth is trending in the wrong direction. At the same time, HPC said that federal policy changes threaten healthcare coverage gains and the financial stability of public programs, especially MassHealth and the Heath Safety Net. Seltz said that the HPC will evaluate the role of the overall benchmark framework and consider potential changes to ensure that it continues to advance the HPC’s key goals of affordability, accessibility, and sustainability. 

“The benchmark alone is not a cost containment strategy – it must be paired with meaningful, structural reforms that address the root drivers of healthcare spending growth,” Seltz said in a statement. “The HPC has made many policy recommendations over the years to advance efficient care and reduce unnecessary waste and will continue to do so, including through our new expanded authorities in the areas of statewide health resource planning and pharmaceutical policy, he added. 

“The benchmark is a measurable goal that is designed to inspire us to take collective action. The data – especially the growth in family and employer premium contributions – shows us that the status quo is not working for the people who live and work in Massachusetts,” continued Seltz. “As recognized earlier this week, the passage of historic healthcare reform 20 years ago proved that even our biggest challenges can be met when we come together with a spirit of compromise and a shared commitment to the public good. That same spirit is needed now.”