CDPHP, MVP Health Care among insurers seeking rate increases

ALBANY — The Capital District Physicians' Health Plan and MVP Health Care are among the nearly dozen health insurance companies in New York seeking to increase their premiums next year because of the rising cost of hospital care, prescription drugs and state regulations.

Insurers submitted requested rate increases to the state's Department of Financial Services for review last month. The requests vary by company and individual plan but average 20.7% for individual market plans and 25.7% for small group plans that cover companies with up to 100 employees.

The proposals, which would take effect Jan. 1, are in the middle of a 30-day public comment period set to end on July 22. The Department of Financial Services will approve final rate adjustments later this summer.

Locally, CDPHP and Schenectady-based MVP Health Care — which insure thousands throughout the Capital Region — are requesting rate increases below the state average for both individual market plans and small group market policies.

CDPHP requested an average rate increase of 1.4% for its individual market plan that consumers can purchase through the state-run health exchange, the lowest of any company in the state. Any rate change would impact 1,881 policyholders, the equivalent of 2,729 consumers, according to the company.

MVP Health Care had the second lowest request for individual market plans at 10.7%, about half of the requested average rate. The company has 11,979 policyholders and 17,683 members enrolled in individual plans.

Both not-for-profit companies cited the rising cost and utilization of medical services and prescription drug costs for the requested increases and said they were taking steps to managing rising costs.

For CDPHP, the rising costs have been compounded by a revenue drain created in 2023, when federal lawmakers adjusted the Medicare Wage Index. The change increased the reimbursement rate paid to local hospitals, but neglected to account for supplemental Medicare Advantage plans.

CDPHP has been paying hospitals at the adjusted rate, but have been reimbursed at the previously lower rate. The insurer has reported $100 million in operating losses as a result of he change between 2023 and 2025 and expects to lose at least $110 million in additional losses over the next two years, according to Natalia Burkart, a spokesperson for the company.

"Coupled with rising prescription drug costs — particularly for high-cost and specialty medications — increasing hospital expenses, and the compounding burden of taxes, fees, and government mandates, these dynamics continue to place pressure on affordability and sustainability," she said in a statement. "These realities demand continued focus and thoughtful action."

It's unclear how the Department of Financial Services will act on the requested rate hikes. A spokesperson for the agency said the department could not comment on pending rate applications, but noted the agency "is closely scrutinizing rate requests to ensure that they are not excessive, inadequate, or unfairly discriminatory."

In recent years, the agency has approved rate increases below the original request. Last year, companies requested increases averaging 13.5% of individual plans and 24% for the small group market, which were approved at an average rate of 7.1% and 13%, respectively.

Health insurers submit rate adjustments annually to the state, though this year's process comes at a time when many are struggling to pay for care and rising insurance premiums remain a top concern for many Americans, according to recent public polling.

Concerns about the growing cost of health insurance have lingered since last year, when Congress let expire a series of COVID-19-pandemic-era premium health care subsidies that drove down insurance costs for millions of Americans who purchased insurance through government-run exchanges. An estimated 19.2 million Americans purchased insurance through the exchange last year, according to the latest federal data, which shows a 13% drop in sign ups compared to 2025.

The Trump Administration has said the decrease is due to a crackdown on fraudulent activity in government exchanges, though the expired tax credits saw insurance premiums double for some, according to KFF, a nonpartisan health policy research organization.

An April poll by the organization found that just under half of U.S. adults reported difficulty affording health care costs, with 3 in 10 reporting a family member facing similar difficulties in the past 12 months.

The poll also found that around 1/3 of adults have postponed health care procedures due to costs and that 43% of adults skipped taking prescription medication due to cost concerns.

"Many U.S. adults have trouble affording health care costs," the poll states. "While lower income and uninsured adults are most likely to report this, those with health insurance and those with higher incomes are not immune to the high cost of medical care."

Insurance companies in New York say they recognize the burden raising premiums will have on consumers, but note the increases are necessary to keep up with growing costs of their own, driven by an uptick in insurance utilization brought on by an aging population as well as surging hospital and prescription drug costs.

At MVP Health Care, the proposed rate increases "reflect the projected cost of providing coverage in an environment where medical and pharmacy expenses continue to rise," according to Michelle Golden, a spokesperson for the company.

In addition to its individual market plan request, the company has proposed an average increase of 19.6% for its small group market plan. MVP Health Service Corp., a subsidiary of the company that handles managed care operations, is seeking a 12% increase to its small group plan.

"As a not-for-profit regional health plan, MVP recognizes the importance of balancing affordability with access to high-quality care," Golden said in a statement. "We will continue to work alongside providers, employers, regulators, and community partners to improve health outcomes and help manage costs for the people and communities we serve."

New York has some of the highest healthcare costs in the country, with healthcare spending averaging 30% above the national average, according to a recent report by the Health Care Cost Institute, a nonprofit research group.

The organization found that New Yorkers pay 39% more for outpatient care compared to the national average and 20% more for inpatient services.

Eric Linzer, the president and CEO of the New York Health Plan Association, said the rising cost of care is compounded by steep regulatory burdens that see insurance complaints pay an additional $7 billion in annual taxes, assessment and surcharges that drive up the cost.

Linzer also pointed to legislation limiting cost-sharing and state requirements that make insurance policies either include or make available 45 treatments and services that go beyond recommendations from national health organizations.

The compounding factors "are reflected in the rates health plans submitted for 2027," said Linzer, who noted that rates will continue to rise unless the state takes steps to reduce the cost-burden for insurers.

"In the absence of state policies to contain these factors and make coverage more affordable for consumers and employers, the final approved premium rates must recognize the high and escalating cost of care in New York," he said.

When it comes to the small group market, CDPHP is requesting an average increase of 14.1% for its 10,382 policyholders that will impact 15,147 members. CDPHP Universal Benefits Inc., which manages the company's high-deductible plans, is seeking a 10.1% increase for its 9,424 policyholders.

The company has been working to reduce administrative expenses in recent years, by bolstering operational efficiencies through new partnerships. In 2024, the company received regulatory approval to affiliate with The Lifetime Healthcare Companies, the parent company of Excellus BlueCross BlueShield and Univera Healthcare.

"We understand that any rate increase is difficult for families and businesses to absorb. That's why we are working diligently to bend the cost curve while preserving the quality our members expect," Burkart said. "We are confident that the steps we're taking today will help build a stronger, more stable foundation for the future."