States like Maryland, Vermont, Washington, and New York have publicly released preliminary health insurance filings for insurers selling in individual and small group markets. Here is a look at those 2026 health insurance rate filings by state and the drivers of the proposed increases:
New York
New York insurers submitted rates to the state in May. Based on these preliminary filings, the weighted average premium increases across insurers in the individual market range from 0.9% to 66.4%, with an average weighted increase of over 13%. Here is a breakdown by plan:
In the small group market, increases range from 6.3% to 28.8%, with a weighted average of 24%. Below is a breakdown by insurer:
In the individual market in New York, the most frequently cited reasons for the premium increase included escalating healthcare costs and regulatory factors. Here’s an overview:
Overall Rising Cost of Healthcare Services and Equipment
Insurers consistently cited rising costs as a primary driver for rate increases. Specifically, this includes increases in demand for care, rising costs to hospitals for goods and services, and skyrocketing hospital costs (inpatient and outpatient care), which account for the largest share of the premium dollar. Increased demand and high-cost drugs, such as weight loss medications and cell and gene therapies, as well as expensive specialty prescriptions, were cited by CDPHP, for example, which experienced an 11% increase in medical and drug costs in 2024 compared to 2023.
Insurers also cited increases in medical service, professional service, and prescription drug utilization, as well as normal inflation of healthcare claim costs and medical cost trend (anticipated change in the cost to treat patients year over year), and changes in the type and quantity of medical services used by members. Aetna also mentioned a 1% increase in costs due to deductible leveraging, where the rate of change in insurer plan cost exceeds the rate of change in total medical costs because deductibles change at a slower rate.
Regulatory Mandates, Taxes, and Fees
Insurers often attribute a portion of the premium increase to various government-imposed costs. Insurers pass New York State taxes and assessments, which amount to over $5 billion annually, to healthcare customers as higher premiums. These include:
- NYS Premium Tax (1.75% on HMO and insurance contracts, with an additional amount for MTA service area customers)
- Covered Lives Assessment (an indirect tax on covered lives, ranging from $3.52-$15.93 per individual contract per month).
- HCRA Surcharge (9.63% on hospital discharges)
- NYS Insurance Department 206 Assessment (charged to insurers based on premium volume, intended for regulatory activities but partly funds other programs).
- Other insurers cited different regulatory mandates. For example, MVP Health Plan cited changes in covered benefits mandated by the State of New York, such as network adequacy requirements, while UnitedHealthcare of New York cited biomarker testing requirements.
Federal Risk Adjustment Program
This federal program, established under healthcare reform law, assesses charges on health plans with low-risk members to compensate plans with higher-risk members, impacting rates. For some insurers, anticipated payments into this program can increase rates (e.g., CDPHP anticipates a lower receivable, which causes rates to grow by 1.7%), while for others, projected receipts from the program might decrease the proposed rates (e.g., Excellus and MVP Health Plan in the individual market anticipate receiving payments, which would lower their proposed rates).
Maintaining Financial Integrity and Reserves
Insurers state the need to generate sufficient revenue and surplus for reserves to ensure continued coverage and claim payments and to meet statutory reserve requirements to avoid being deemed impaired. For instance, IHBC earmarks approximately 3% of each premium dollar for reserves.
Market Morbidity and Demographics
Factors like the aging population and changes in the age, gender, and health status of members contribute to rising costs. For MVP, a change in the availability of enhanced Advanced Premium Tax Credit subsidies will impact market morbidity, resulting in a 7.1% increase. UnitedHealthcare also cites the high cost of individual enrollees and the inadequacy of current rate levels.
Administrative Expenses and Operating Margins
While state law requires at least 82% of premiums to cover medical costs (Medical Loss Ratio (MLR)) the remaining portion covers administrative expenses, profit, and taxes. Insurers like Excellus target specific operating margins (1.5% for individual businesses) to ensure continued operations. Some administrative costs include customer service, claims processing, premium billing, system maintenance, and quality improvement programs.
Small Group
In the small group market, insurers presented similar reasons for premium increases. While the fundamental cost drivers like the rising cost of healthcare services, demand for high-cost drugs, and the impact of New York State taxes and assessments remain common across both individual and small group markets, the federal risk adjustment program, the influence of federal subsidies, and specific legal frameworks create distinctions in premiums for each market segment.
Why are proposed premiums increasing faster in the small group market?
As we saw earlier, insurers expect premiums in the individual market to increase by about 13.5%, while the small group market experiences a nearly 24% increase. With many insurers in the individual market citing the possible expiration of enhanced subsidies driving up premiums, you may expect larger increases in the individual market than in the small group market.
Digging into the data, the Federal Risk Adjustment Program appears most impactful. This program, designed to balance risk among health plans, has a markedly different and often opposite impact on the individual and small group markets for certain insurers, significantly contributing to the disparity in average rate increases.
In the individual market, some insurers anticipate receiving funds from this program, which reduces their proposed rates. For instance, UnitedHealthcare of New York, Inc. states that the estimated risk adjustment value reduces their market costs by 20.2%. Excellus Health Plan, Inc. also anticipates receiving more payments for its business, resulting in a decrease of 2.6% to its proposed individual premium rates. While CDPHP anticipates a lower receivable resulting in a 1.7% increase, and Independent Health Benefits Corporation (IHBC) expects to become a net payer to Risk Adjustment for their market, requiring 7.3% of the revenue, the overall impact from other larger carriers is a reduction or lesser increase.
Small Group Market
In the small group market, many insurers anticipate paying into the program or experiencing an increase due to it. Most strikingly, UnitedHealthcare Insurance Company of New York states that the estimated risk adjustment value increases their small group costs by a substantial 24.7%. Additionally, Excellus Health Plan, Inc. anticipates having to pay more into this program for its small group business, resulting in an increase of approximately 2.8% to its proposed premium rates.
CDPHP anticipates a payable, increasing its small group rates by 5.8%, and CDPHP UBI also expects a 1.1% rise due to an anticipated payment. IHBC expects to pay approximately 5.9% of revenue to this fund for the small group market. MVP Health Service Corp cites a +3.7% impact from this program, and Oxford Health Insurance Inc. notes that while the estimated risk adjustment value reduces costs by 0.1%, changes in the average risk of the New York small group market increase costs by 2.4%.
The cumulative and significantly higher increases from the risk adjustment program in the small group market, particularly from large carriers like UnitedHealthcare, are a major driver of the higher overall average requested increase.
Washington
Washington insurers submitted requested rates to the state in May. Based on these preliminary filings, the weighted average premium increases across insurers in the individual market range from 9.6% to 37.35%, with an average weighted increase of 21.2%. Below is a breakdown by plan:
In the small group market, increases range from 1.9% to 15.8%, with a weighted average of 9.5%. Below is a breakdown by insurer:
The Washington filings do not contain a narrative like New York, although the primary reason for the rate increase is an anticipated rise in annual medical costs. Health insurers cited increased costs ranging from 4.9% to 21.1%. Other factors included:
Prior Financial Performance (Losses)
Several companies reported significant financial losses from January 2024 to December 2024. These losses indicate a need for higher premiums to cover past deficits and move toward profitability. For example, seven insurers cited losses in the millions of dollars in 2024, including Coordinated Care Corporation, Community Health Plan of Washington, Kaiser Foundation Health Plan of the Northwest, Kaiser Foundation Health Plan of Washington, Regence BlueCross BlueShield of Oregon, Regence BlueShield and UnitedHealthcare of Oregon.
Planned Premium Allocation and Profit Margins
Insurers typically plan how they will spend premium revenue, allocating percentages to claims, administration, and profit. While profit itself is not a reason for the increase, the target profit margin contributes to the overall premium.
Many companies aim for a specific profit percentage, often around 2% to 4% of the premium, if rates are approved. Notably, LifeWise Health Plan of Washington (Non-Grandfathered plans) and Premera Blue Cross planned for a negative profit (a loss of -2.67% and -2.56%) for 2026. This negative profit suggests their requested increases aim to mitigate financial deficits rather than generate profit, which further underlines the cost pressures.
Risk Adjustment
Many companies cite substantial figures for risk adjustment in their key information for rate development. Significant payments out for risk adjustment can contribute to the need for higher premiums. For example, Coordinated Care Corporation listed a negative risk adjustment of -$68,113,886.
Small Group Plans
Without a narrative element to the filing, it is difficult to isolate the reasons for the rate increases in the small group market. However, they are likely similar to those noted above, with most plans indicating they expected high anticipated healthcare costs like those in the individual market.
Maryland
Maryland insurers submitted requested rates to the state in May. Based on these preliminary filings, the weighted average premium increases across insurers in the individual market range from 8.1% to 18.7%, with an average weighted increase of 17.1%. Here is a breakdown by plan:
For the Maryland small group market, carriers have requested an overall average rate increase of 5.5% for 2026. The average rate of requests by carriers in this market ranges from 3.3% to 12.3%.
Individual Market
Here are the key factors driving these rate increases:
Anticipated Loss of Federal Enhanced Premium Tax Credits
Maryland insurance regulators described premium tax subsidy losses as an overarching driver for the highest individual market rate increases proposed since the state reinsurance program began in 2019. If these federal enhanced tax credits were to be reauthorized by Congress, the overall average rate change would instead reflect an increase of 7.9%, with most carriers requesting between 5% and 7%, significantly lower than the currently proposed 17.1%. Insurers expect the expiration of these subsidies to lead to higher costs as healthier enrollees might exit the market.
Increase in Base Period Claims Experience / Medical Service Costs / Utilization
Insurers consistently cite an increase in the historical claims experience as a core reason for premium rate increases. Annual increases in reimbursement rates paid to healthcare providers such as hospitals, doctors, and pharmaceutical companies primarily drive up premiums. Additionally, there is a growing number of office visits and other services, and the intensity of care and the use of different types of health services influence healthcare spending. Kaiser projects an annual increase of 5.1% in medical claims costs for its Maryland small group portfolio based on past trends. Kaiser projects a 4.8% increase in medical claims costs.
Medical and Prescription Drug Inflation
This factor accounts for the general increase in healthcare spending over time, encompassing both unit cost and utilization trends for medical services and prescription drugs. For instance, CareFirst BlueChoice assumed a composite annualized trend of 6.5% for its market products, while Wellpoint Maryland, Inc. uses a composite annualized trend of 6.4%.
Adjustments to Membership, Morbidity, and Risk Adjustment
Changes in the health status of the insured population play a role. The anticipated loss of federal subsidies, for example, can lead to an expectation of worsened morbidity in the market, impacting rates. Changes in the estimated amounts an insurer will pay into or receive from the federal risk adjustment program also influence rates.
Updates to administrative cost analyses have shown that these costs are sometimes higher than previously estimated and included in the requested rate changes. State and federal government-imposed taxation and fees, including ACA taxes and fees, are significant factors that impact healthcare spending and premiums. For example, Kaiser assumes an annual increase in administrative costs of 11% for its portfolio. Wellpoint projects total non-benefit expenses to be approximately 18.5% of the premium for 2026, which includes 10.2% for administrative outlays and 4.1% for projected taxes and fees.
Improvements in medical technology and clinical practice often require the use of more expensive services, contributing to increased healthcare spending and utilization.
Higher Costs from Deductible Leveraging
A greater percentage of healthcare costs need to be covered by health insurance premiums each year because deductibles and copayments remain constant while healthcare costs continue to rise annually.
Cost Shifting from the Public to the Private Sector
Hospitals often recoup shortfalls in reimbursements from government programs like Medicare and Medicaid by charging private health plans more, which can lead to higher premiums in the private market.
Small Group Market
Outside of the end of subsidies, insurers in the small group market stated similar reasons for increased premiums in the small group market: increased medical service costs, risk adjustment, administrative costs, government-imposed taxes/fees, the impact of new technology, higher costs from deductible leveraging, and cost-shifting from the public to private sector.
Vermont
Vermont has only two insurers selling individual and small group plans, Blue Cross Blue Shield of Vermont and MVP, and they submitted their proposed premium rate increases in May. In the individual market, MVP proposed a 6.2% increase, while Blue Cross Blue Shield of Vermont proposed a 23.3% increase. In the small group market, MVP proposed a 7.5% increase, while Blue Cross Blue Shield of Vermont proposed a 13.7% increase. The chart below highlights those changes:
These rate requests are submitted to the Green Mountain Care Board each spring for approval. Insurers primarily attribute the increases to rising healthcare and pharmaceutical costs. Blue Cross Blue Shield proposed increases partly due to the need to rebuild cash reserves that it depleted since the COVID-19 pandemic. Also, because their customer pool is less healthy, it attracts members who require more comprehensive care. MVP states that its rate request is based on a thorough financial evaluation of the Vermont market, reflecting increasing costs of care, pharmaceutical expenses, and higher utilization of healthcare services.
Blue Cross Blue Shield plans to limit coverage for popular GLP-1 weight-loss drugs, such as Zepbound and Wegovy, on its individual and small group plans to help reduce costs. Without this change, their requested premium hikes would have been higher by an additional 1.3 percentage points for individual plans and 2.3 percentage points for small group plans.
A significant factor complicating these projections is the uncertainty surrounding federal subsidies that help people pay for health insurance. Blue Cross Blue Shield projects a significantly lower premium increase of 15.61% for its plans, and MVP projects a decrease of 0.48% for its plans if Congress renews the subsidies.
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