Double-digit health insurance rate hikes coming to WNY individuals, small businesses in 2026

Many consumers and small businesses across the state will see double-digit percentage increases for health insurance in 2026, highlighting the rising cost of medical care, inpatient hospital stays and skyrocketing drug prices.

In the individual market, insurers requested an average rate increase of 13.5%, but state regulators knocked that down to 7.1%, the Department of Financial Services announced late Friday. Meanwhile, in the small group market, insurers requested an average rate increase of 24%, but the state cut that to 13%.

The rate adjustments affect people who buy individual commercial health insurance and small employers with 100 or fewer full-time workers, together comprising a small slice of members for most insurers. While the rate increases do not affect large employers with more than 100 workers, the situation is indicative of the upward pressure on health insurance premiums that is becoming an annual certainty.

Here is what the state approved for Western New York’s three largest health plans:

• Highmark Western and Northeastern New York, which includes Highmark Blue Cross Blue Shield of Western New York, wanted an average increase of 23.9% in its individual market – in which it has about 3,200 members – but the state approved a 19.4% increase. For small group plans, in which Highmark has 33,900 members, the insurer sought an average increase of 18%, but the state knocked that down to 11.4%.

• Independent Health requested an average rate increase of 38.4% in the individual market, where it has roughly 7,300 members, but the state approved a 20.8% hike. On the small groups, in which Independent Health lists about 44,200 members, the insurer requested an increase of 19%, but the state cut that to 14.4%.

• Excellus Health Plan, which includes Univera Healthcare, sought an average rate increase of 24.8% in the individual market, but was approved for a 20.7% hike. For small groups, Excellus requested an average increase of 19.6%, but the state cut that to a 15% hike. Excellus, based in Rochester, has more than 21,000 members in its individual plans, and almost 133,000 small group members.

After the state receives the requests from the insurers, it evaluates the requests and gathers public feedback before adjusting the rates. The rates approved Friday will go into effect Jan. 1.

The region’s two largest insurers, Highmark and Independent Health, reported financial losses in 2024. Independent Health had a net loss last year of $66 million on revenues of $2.5 billion, while Highmark reported a net loss of $140 million on revenue of $3 billion.

Independent Health on Aug. 19 announced it was eliminating 59 jobs, or a little less than 4% of its workforce, as the health plan cut expenses.

Independent Health cutting 59 jobs as health costs rise

The cuts come after Independent Health reported that it had a net loss last year of $66 million on revenues of $2.5 billion.

Excellus last year posted a profit of $25.6 million, due to strong investment results that offset a $163 million operating loss.

In statements earlier this year when the rate hikes were requested, Western New York health insurers said the increases were necessary to cover the anticipated rising cost of medical care in 2026.

“The requested rates reflect the anticipated rising costs of our New York members’ medical care and pharmacy costs; unprecedented inflationary pressures on the unit costs for medical procedures; high utilization rates and pent-up demand for care after the pandemic; and the unique mandates, taxes and fees that significantly drive up the cost of insurance in the state,” Highmark said in a statement Friday.

In a statement, Eric Linzer, president and CEO of the New York Health Plan Association, said New York’s health care costs are among the highest in the country, which was reflected in the rate requests that insurers submitted to the state. The Health Plan Association represents 20 managed care health plans.

“Affordability is the most pressing health care issue for individuals and small businesses,” Linzer said.

Other insurers with a presence in Western New York also received increases.

WNY health insurers seek rate hikes of 18% to 38% for 2026

The rate requests submitted to the state, and posted online this week, affect people who buy individual commercial health insurance and small employers with 100 or fewer full-time workers.

That includes Fidelis, which requested an 8.1% increase in the individual market, but was approved for a 2.9% hike. MVP Health Plan, which asked for an individual market bump of 8% and a small group increase of 21.5%, was approved for a 7.4% increase in the individual market and a 17.9% increase for small groups.

The state said about 240,000 New Yorkers are enrolled in individual commercial plans, while 685,000 New Yorkers are enrolled in small group plans.

By cutting insurers’ requested rates 47.4% in the individual market, the state said that saved consumers $148.2 million. By cutting insurers’ requested rates by 45.8% in the small group market, that saved small businesses $810.8 million, the state said.

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