Double-digit health insurance rate increases – some over 20% – coming to WNY

Certain bad news has a way of getting announced on a Friday before a holiday weekend.

That’s what state officials did Friday when they disclosed the approved health insurance rates for 2025: Many consumers and small businesses will be looking at double-digit increases that, in some cases, will top 20%.

In its announcement, the state Department of Financial Services said the approved health insurance premium rate increases highlight the rising cost of medical care, particularly the expense of inpatient hospitals stays and the skyrocketing prices of drugs.

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 as certain as the annual increase in the cable and internet bill for consumers.

Univera Healthcare exterior (copy)

Excellus BlueCross BlueShield is the parent company of Univera Healthcare. Excellus was approved for an average rate increase of 18.3% in the individual market and an average increase of 10.5% in the small group market.

Here’s how it shakes out in Western New York:

* Highmark Western and Northeastern New York, which includes Highmark Blue Cross Blue Shield of Western New York, had requested an average increase of 30.9% for individuals – about 4,100 members are enrolled in these plans – and the state approved an increase of 26.5%. For small group plans, in which Highmark has about 36,000 members, the insurer sought an increase of 19%, but the state knocked that down to 11.4%.

* Meanwhile, Independent Health requested an increase of 27.7% in the individual market, where it has roughly 11,500 members, but the Amherst-based health plan was approved for a 24.4% increase. On the small groups, in which Independent Health lists about 52,500 members, the insurer requested an increase of 28.1%, but the state dropped that to 21.7%.

* Excellus Health Plan, which includes Univera Healthcare, requested an average increase of 19.5% in both the individual and small groups markets. But Rochester-based Excellus, which has more than 28,500 members in its individual plans and almost 139,000 small group members, was approved for an 18.3% increase in the individual market and a 10.5% jump in the small group market.

Other insurers with a presence in Western New York also requested and were approved for increases.

That includes Fidelis, which requested a 9.8% increase in the individual market but was approved for a 5.9% jump.

MVP Health Plan, which wanted an individual market bump of 19.2% and a small group increase of 9.5%, received approval for a 17.9% increase for individuals and a 4.5% increase for small groups.

United Healthcare, which sought an 8.8% increase for individuals and an 11% bump for small groups, was approved for a 0% increase for individuals and a 1% increase for small groups.

Big health insurance rate increases sought for WNY small group, individual plans

The three dominant health plans in Western New York all requested substantial rate bumps for 2025 because of rising costs, particularly for hospital care and for pharmaceuticals.

The New York Health Plan Association, which represents 26 managed care health plans, said in a statement Friday that the proposed premium rates that health plans submitted to the state in May reflected the high cost of health care in New York.

“Unfortunately, the final approved rates fail to fully recognize these factors or account for the premium reductions the state has imposed the last several years,” association President and CEO Eric Linzer said.

Overall, the state reduced insurers’ requested rates by 23% in the individual market and by 55% for small groups, collectively saving the 1 million New Yorkers enrolled in those plans about $853 million.

The average increase requested by health plans in the state was 16.6% in the individual market and 18.6% for small groups. In its final adjustments announced Friday, the state knocked that down to an average of 12.7% for individuals and 8.4% for small groups.

What WNY insurers say

Highmark said the approved premium increases affect about 8% of its members and “directly reflect the anticipated cost of medical care, including increased hospital and prescription costs, as well as government taxes and mandates.”

Rich Argentieri, chief sales and marketing officer at Independent Health, said the company was “disappointed” the state lowered its rate requests for the second straight year.

He said the premium rates reflect prolonged medical inflation, increased use as members seek care that was postponed during the Covid-19 pandemic and continued increases in prescription drug costs, particularly for high-cost specialty drugs in the categories of weight loss, oncology, immunotherapy and rare disease.

For Independent Health, pharmaceutical costs now account for the largest portion – 28% – of its members’ premium dollar.

With the rates now set, Univera said in a statement it is “now focused on helping our members and employers select health insurance plans that best meet their needs.”

All three of the major local health plans reported financial losses last year.

The local Highmark affiliate reported a net loss of $21 million on revenues of $3.1 billion last year, while Independent Health recorded a net loss of about $193 million on revenues of $2.3 billion. Excellus, which includes Univera, reported a net loss of $23 million on revenues of $6.6 billion.

The health plans do have hundreds of millions of dollars in state-mandated reserves, which helps to absorb the losses and maintain financial stability even in down years.

What consumers say

When an insurer files a proposed premium rate increase with the state, it must send affected customers a notice letting them know an application has been submitted. In that notice, consumers are informed they can send comments to the state about the planned adjustment.

And consumers sure did comment on the proposed rates.

According to state records, the state received 773 pages of consumer comments during the comment period that ended July 14.

Comments from the public can factor into the state’s review of each rate request. In that review, the Department of Financial Services evaluates the applications and the insurer’s underlying calculations to “make sure that rate increases are justified and not excessive,” according to its website.

But in comments to the state posted online, many consumers – whose names were redacted – argued that the increases were excessive.

One Independent Health member said he started with a plan, with a $600 deductible, that was $655.06 per month in 2023 and then increased to $816.75 per month in 2024. “The taxes and high costs in this state are just causing more people and businesses to want to leave New York,” the consumer wrote. “Please do not raise the rates.”

A Highmark member, meanwhile, described the company’s 19% rate request adjustment for small groups as “astronomical.”

“This increase will drastically affect our bottom line,” wrote the small group consumer.

In a June 11 letter that was not redacted, Daniel J. Heitzenrater, president and CEO of the Chautauqua County Chamber of Commerce, argued the proposed double-digit hikes would “cause substantial financial harm to both businesses and their employees in the coming year.”

“Some of our local businesses have already suggested that additional expenses for small employee groups will be unaffordable, as they also face increased costs due to staffing expenses, rising supply costs and more,” he wrote.

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