I had my second child in March and in May was grateful to return to Pioneer Women’s Health at Baystate Franklin for long-term contraception. Although this was free to me thanks to the Affordable Care Act (ACA), I was shocked to find that my insurer paid Baystate $3,945 dollars for my IUD (intrauterine device). That’s not the sticker price that the hospital charged my insurance, but rather the rate Aetna had already negotiated down to. It’s also not the cost for the procedure as a whole — an additional $340 for the use of the facility and only $86 for the time and expertise of the midwife. The $3,945 was the cost for the device alone: a Mirena IUD that costs a few dollars to produce, is priced around $1,250 by the manufacturer, and which the hospital likely purchased for only a few hundred dollars due to federal 340B subsidies. That’s a markup of 200% at minimum and perhaps up to 3,800%.
As a women’s healthcare provider, I wanted to unpack this flabbergasting bill. And as a community member, I wanted to understand how healthcare costs like this actually might have a direct effect on problems we face locally like affording our rural public schools. Here’s how I think the pieces connect.
To start off with, who benefited from my $4,000 IUD? The most obvious answer is Baystate, who my insurer paid. A charitable read would be that Baystate needs to profit as much as possible from private insurance to offset economic uncertainty, declining patient volumes, and the large fixed operating costs associated with running a rural hospital. This is especially true since Masshealth reimburses a medical device like this at a 0% mark-up (i.e. whatever the hospital originally paid for it). No doubt that adds up when more than 65% of Baystate Franklin’s patients are covered by Medicaid or Medicare, and those programs are facing large federal cuts associated with the One Big Beautiful Bill.
But it’s more complicated than that. Federal support, for example in the form of 340B savings, is supposed to help Baystate provide affordable care to low-income patients while covering its costs. But that’s not working either. Not only was my subsidized IUD expensive, but just this summer, Baystate reported a $60 million budget deficit, laid off employees across the hospital system, and continued its stand-off with nurses over fair wages, safe staffing, and, ironically, affordable health insurance. Meanwhile, Baystate’s CEO has a whopping compensation package of over $2.5 million, which somehow still appears to be below average for non-profit hospital systems in Massachusetts.
And finally, all this begs the question — why is my private insurance willing to pay that much of a mark-up? Under the ACA, insurers must spend 80% of premiums on medical care. The remaining 20%, their margin, grows as premiums grow. Paying $4,000 for an IUD in this system therefore isn’t a problem for an insurer so long as it helps justify large premium hikes.
This system — and the high healthcare costs it results in — has big implications for small towns. Health insurance premiums for fiscal year 2027 increased 13% for Mohawk Trail Regional School District employees. This is no small matter when employee benefits account for almost a quarter of the school district budget, and the school district budget is in turn the majority of many town operating budgets — 58% in Buckland, where I live. Small towns face the same challenges we all do — they either have to find a way to increase income [raising taxes] or make cuts [firing employees]. Just last month, Buckland initially voted down a MTRSD budget that had already cut 20 positions in a desperate effort to send a message to the state: rural towns can’t afford our schools at rates of state funding that have failed to keep pace with expenses like the rising cost of employee healthcare [see https://www.ruralschoolsma.org/]. While the budget ultimately passed, the problem is only bound to compound in the coming years.
This is, undeniably, a tangled web of problems to solve at all levels of government. As we wrestle with these difficult local issues, let’s not forget to direct some of our collective political energy toward state and federal reforms that could shift the landscape and make new solutions possible.
Maya Rogler lives in Shelburne Falls.