While it is the largest dental insurance provider in NH, Concord-based Northeast Delta Dental is also an employer that must provide a competitive medical, vision and dental benefits package for its own workforce. And it comes at a hefty price tag.
“If you include our subsidiaries, we have about 225 employees, and a little less than 200 are on our group medical plan, which happens to be Anthem,” says CEO Tom Raffio, who signs off on medical insurance invoices totaling between $275,000 and $300,000 per month, or roughly $3.6 million annually. “That’s a huge expense,” he says. “And we have a good plan, but it’s not a Cadillac plan.”
Many Granite Staters and employers are experiencing sticker shock when it comes to health insurance costs. Average family insurance premiums for employer-sponsored health care in NH have risen 121% since 2005 to $26,119 in 2024. At the same time, employee deductibles increased even more—a staggering 323%—to an average of $4,335 according to the NH Fiscal Policy Institute (NHFPI). These exponential increases have put increased pressure on efforts to bring health care costs down without compromising access or quality.
Insurers point to a web of interconnected forces for these increases including greater use of care, expensive drugs, provider consolidation, and demographic shifts.
According to Maria Proulx, president of Anthem Blue Cross and Blue Shield in NH, the largest health insurer in NH, recent premium pressure reflects a sharp increase in how frequently people use health care services. Emergency room visits, outpatient surgeries, and behavioral health care visits have all risen, driven in part by the transition of residents off Medicaid into the commercial insurance market.
“When folks come off of Medicaid and choose an Anthem plan, our data shows they tend to use the ER twice as much as a traditional commercially insured person,” Proulx says. Anthem has also seen growth in outpatient surgery and what they describe as pent-up demand for elective procedures that were delayed but are now returning to pre-pandemic levels.
That rise in use means a bigger bill for employers, says Raffio. “Utilization is really the story,” Raffio says. “Whether you’re an insurer or an employer, it comes down to how often care is used, where it’s used, and whether it’s the right care at the right time. That’s what ultimately shows up in premiums.”
Behavioral health services are another major contributor, though one Proulx says was anticipated. Over the past two years, Anthem has expanded behavioral health provider networks and eliminated copays for many services to improve access.
“While these changes have increased costs in the short term, the goal is that over the longer term we will take unnecessary costs out of the system downstream,” she says of the change.
“If people receive their primary care–level mental health care, our hope would be a reduction in the use of emergency room services. As an example, members with severe anxiety are not showing up in the ER thinking they’re having a
heart attack.”
The Cost of Operating
There are many reasons health care is increasingly expensive, but one common theme is that a small number of people account for the majority of costs. Overall, 10% of the people on employer-based coverage in 2022 accounted for 71% of the costs, according to the Employee Benefit Research Institute. One place this dynamic shows up in NH is prescription drugs. Proulx points to Trikafta, a cystic fibrosis treatment. Spending on all specialty drugs, including Trikafta, accounts for just 2.5% to 3% of prescriptions among Anthem customers, but roughly 50% to 60% of total pharmacy costs. Less than 1% of the population has cystic fibrosis.
“It’s life-changing, and something any of us would want for ourselves or a family member who needs the medicine. It increases a person’s life expectancy from 25 to 75 years,” she says. “But that one drug costs $300,000 per person per year. So, you can imagine how much premium we need to take in from everybody else to cover that.”
Insurance premiums are built around pooled risk, spreading the high costs of care for a small number of patients across a much larger population. In NH, insurers project claims across individual, small-group, and large-group plans months in advance before filing rates with the NH Department of Insurance.
State and federal laws constrain how insurers operate. Health plans are required to spend between 80 and 85 cents of every premium dollar on medical care, a standard known as the medical loss ratio. If insurers fall below that threshold, they must rebate the difference to customers. “If we charge too much, we have to give it back,” Proulx says. “If we charge too little, then we have a solvency problem.”
On the provider side, hospital consolidation has further complicated cost containment, says Proulx. Only seven of NH’s 26 hospitals are truly independent, with most owned by three large systems. While mergers are often justified as a way to lower costs, Proulx says the evidence does not always support that claim. “Mergers and acquisitions always promise lower costs,” she says. “But studies do not always show that outcome.”
Recent failed mergers underscore both consolidation pressures and regulatory limits. Elliot Health System and Southern NH Health are dissolving their affiliation after finding their strategies incompatible, while a proposed merger between Dartmouth Health and GraniteOne Health was terminated in 2022 after the Attorney General raised antitrust concerns.
Network adequacy laws also shape negotiations. Insurers must demonstrate sufficient geographic access to hospitals and physicians to sell plans in the state. “If we don’t have certain hospitals in our network, we can’t sell business in New Hampshire,” Proulx says. “That can create unequal bargaining power, often leading to higher rates.”
Demographics add yet another layer of pressure. More than 22% of NH residents are now over age 65, a share projected to rise to 27% by 2050, according to NHFPI. “We don’t have enough long-term care facilities, enough post-acute care, enough in-home nursing,” Proulx says. “Older patients stay in hospitals because there’s nowhere safe to discharge them.”
Older patients are also less lucrative for hospital and health care systems because Medicare reimbursement is much lower than private insurance. So, as the population ages, these providers treat more people for less money. According to Kaiser Family Foundation, people with private insurance pay close to double that of Medicare rates for all hospital services and even more for outpatient services.
Hospitals often negotiate higher prices with private insurers to make up for lower Medicare and Medicaid reimbursements. “This is commonly referred to as “cost shifting,” Proulx says.
A range of factors – higher utilization of services, increased provider charges, higher drug costs, along with cost-shifting – Proulx explains, are the primary causes of higher premiums. “At the same time, employers and insurers offer plans with higher annual deductibles in an effort to keep premiums from increasing even more,” she says.
Investing in Primary and Preventative Care
To blunt long-term cost growth, Anthem has invested heavily in primary care and prevention through value-based care programs that pay providers to manage the total cost of care. Results have been mixed, prompting Anthem to revise programs and tie incentives more closely to performance. The insurer has also expanded work on social determinants of health, partnering with Easterseals to help people newly enrolled in commercial plans navigate the system and avoid unnecessary emergency room use.
A similar philosophy, paying more upfront to reduce costs later, guides Northeast Delta Dental, a nonprofit dental insurer that serves over one million people across Maine, NH, and Vermont.
A cornerstone of Northeast Delta Dental’s cost strategy is its Health through Oral Wellness “HOW” program, an approach that reflects a broader shift toward prevention. Using risk assessment software, the program identifies patients who would benefit from additional preventive care. High-risk patients may receive three or four cleanings per year, adult fluoride treatments, or sealants. Courtney Morin, vice president of actuarial and underwriting, says these services increase costs upfront but save money long term.
“When we add the program, preventive costs go up in the first year or two,” Morin says. “But major restorative procedures like crowns or extractions go down over time.”
Adds Raffio, “You pay more now, but you save later. And you get better outcomes.”
Trade Offs and Limited Choices
For employers buying into small group insurance plans, there aren’t always a lot of options. Britni Landry, executive director for Pastori | Krans, a law firm in Concord, says, “We don’t have a huge menu of health insurance options for small businesses—it’s basically Anthem, Harvard Pilgrim, and UnitedHealthcare.”
Every year, Landry says, “we look at all three, but we end up sticking with Anthem.” The biggest reason, she says, is premiums. “Their increases have been more reasonable year after year, and for a small business, that consistency really matters.”
Landry adds that while coverage areas for doctors and hospitals as well as plan offerings is considered, at the end of the day, “the monthly premium hits people’s paychecks directly.” Speaking as both an employer and an employee, that number matters more to me than shaving a few dollars off a co pay, especially if you’re generally healthy,” she says.
Pastori | Krans has done surveys and gathered employee feedback about what matters most to employees. “Knowing what our team prioritizes is a major factor in choosing a provider each year,” Landry says. “I also make sure employees have the chance to meet with our broker one on one during renewals so they can ask questions and feel confident about the coverage they’re selecting.”
Managing Costs
Last year, Northeast Delta Dental switched its employee medical coverage from Harvard Pilgrim to Anthem, a move driven largely by cost. Ryan King, the company’s vice president of human resources, says the change reduced spending by about $275,000 annually while also improving benefits.
“[The change] was apples to apples, we ended up with eight or nine positive changes,” King says. “There were no real trade-offs.”
Raffio initially hesitated, concerned about disrupting employees’ care. But an analysis of provider networks and plan design showed Anthem’s coverage was comparable, if not slightly better. “It would have been irresponsible not to bring that to the board,” Raffio says.
As both an insurer and employer, Northeast Delta Dental focuses heavily on utilization. King reviews utilization reports monthly with the company’s broker. “Utilization is the key driver,” King says. “Here’s what you pay in premium, here’s what we’re spending—that’s what drives renewal rates.”
Employees at Northeast Delta Dental are educated on using urgent care or walk-in clinics instead of emergency rooms when appropriate, and on maximizing plan benefits to avoid unnecessary out-of-pocket costs.
On the dental side, utilization is also the primary cost driver, says Morin. After a pandemic-era lull, dental visits have returned to pre-COVID levels, driving higher claims.
Staffing shortages have added pressure, particularly a shortage of hygienists, leading dental offices to seek higher reimbursements. About 90% of Northeast Delta Dental’s premium revenue goes directly to paying dentists.
For 2026, Northeast Delta Dental increased rates paid to NH dental offices by 2.9% while maintaining a provider network that includes about 92% of the state’s dentists.
As insurers and employers alike push more aggressively toward prevention and value-based care, both Anthem and Northeast Delta Dental emphasize that transparency and education are essential, especially as costs continue to rise and decisions become more complex for consumers.
“Healthcare is hyper-personal,” Proulx says. “I live here. I’m raising my kids here. I use the same system. We make mistakes, but we’re not hiding from these conversations.”
