Staff says federal adjustment metric could have spiked deductibles by 17%
Feb. 13, 2026…..Massachusetts health regulators voted to freeze deductible limits for 2027 insurance plans to avoid a sharp increase but stressed a new adjustment formula is needed to reflect the reality of coverage options.
As part of the state’s individual health insurance mandate, the Massachusetts Health Connector sets deductible limits that help define what is considered adequate insurance coverage. Bay Staters enrolled in plans that do not meet so-called minimum creditable coverage standards are subject to a tax penalty.
Higher deductibles mean policyholders can have lower premiums but also end up paying more out-of-pocket costs. Higher deductibles also create more flexibility for insurers and their plan designs.
The Health Connector board voted Thursday to stick with current deductible limits into 2027, which are $3,200 for individuals and $6,400 for families.
Deductible limits are indexed annually based on either a premium adjustment metric from the U.S. Department of Health and Human Services or another metric decided by the Connector board, said Kayla Scire, the Connector’s associate director of policy. If the Connector used the federal metric to adjust deductibles for 2027, limits would have climbed to $3,750 for individuals and $7,500 for families.
“This is a 17.2% increase, which is significantly higher than ever before,” said Scire, who noted there was already a “steep increase” of nearly 11% last year.
Connector staff were concerned the 17% increase “could send the wrong signal to the market as it relates to reasonable cost-sharing,” she said.
“Health Connector staff plan to think more deeply about indexing these deductibles going forward, and whether there’s an alternative approach that would be less volatile,” Scire said.
Scire also said the Connector received the federal adjustment formula “very late” and staff could not develop their own indexing factor “within a week or two.”
“We wanted to give it our due diligence,” she said.
Around 46% of commercially insured residents have a high-deductible health plan, defined as at least $1,650 for individuals or $3,300 for families, according to a December report from the Center for Health Information and Analysis. Some 72% of residents with medical debt attributed it to deductible payments.
Board member Eric Gulko raised a concern that policyholders could get hit with a tax penalty if their plan deductible rises beyond what the Connector considers acceptable for minimum creditable coverage.
“I just want to balance our desire to not normalize too high a deductible with the policy consideration of having people not have to pay taxes if they’re doing what they can to enroll in their company plans, wherever they are,” Gulko, president of Innovo Benefits Group, said. “Deductibles are going up every year — they’re not freezing this year. So we may be freezing our definition, but deductibles are not freezing.”
Board vice chair Nancy Turnbull said the topic “reflects our lack of collective success” in controlling costs.
Turnbull said she hoped the governor’s new Health Care Affordability Working Group could offer some solutions to help the Connector navigate rising deductibles and the impact on the individual mandate. That group met privately Thursday, and Healey administration spokespeople did not answer News Service questions about where and when the meeting was held and what topics came up.
The Connector board also reviewed data from the 2026 open enrollment period, which saw major disruptions as members grappled with the expiration of federal subsidies and rising premiums.
Total enrollment is down by about 7%, or 27,500 members, when comparing the start of November 2025 to February 2026, said Signe Flieger, the Connector’s director of policy.
The Connector had counted 365,830 enrollees in January, but that number fell to 352,123 in February. Typically February enrollment increases compared to January tallies, Flieger said.
“A significant driver of this decrease was due to the large number of individuals enrolled in unsubsidized coverage who did not end up paying for their January enrollment and were ultimately terminated back to Dec. 31,” Flieger said.
More than 22,000 people also actively terminated their coverage and cited the lack of affordable premiums, Flieger said. That is more than double the volume of cancelations in 2025.
The Connector is bracing for additional federal policy impacts from the One Big Beautiful Bill Act, said Executive Director Audrey Morse Gasteier.
“We have more subsidy rollbacks that will hit tens of thousands more lawfully present immigrants in the 2027 open enrollment period, and then have new red tape changes coming during the 2028 open enrollment period that we expect will make coverage harder to get into and to keep,” Morse Gasteier said.
