Health care premiums for New Yorkers were set to increase. Now subsidies will expire

Health insurance premiums for thousands of New Yorkers are set to increase next year at the same time enhanced subsidies that helped offset the growing cost for many are set to expire, delivering a double blow that will lead to fewer people being insured, according to industry leaders.

The state's Department of Financial Services in August approved a slew of rate increases that range from minor adjustments to hikes of more than 20% for around a dozen insurance providers offering individual and small group market plans, including Schenectady-based MVP Health Care and the Capital District Physicians Health Plan, or CDPHP.

The department cited "the rising cost of medical care" - including in-patient hospital stays and "rapid increases" to prescription drugs - as the main driver behind the adjustments, which average 7% for individual plans and 13% for small group market policies available to employers with up to 100 workers.

Around 930,000 New Yorkers are enrolled in individual and small group plans.

But the approved increases slashed nearly half from the initial requests from the companies, which averaged 13.5% and 24% for individual and small group plans, respectively.

The Department of Financial Services said in a statement that the reductions will save consumers and businesses a combined $959 million for 2026. The department also noted it capped profit provisions for the companies at 1% "in light of the continued increases in costs of health care and other consumer goods."

But the rate increases still mean greater out-of-pocket costs at a time when health insurance premiums are set to spike for an estimated 140,000 New Yorkers due the expiration of enhanced COVID-era subsidies that will sunset at the end of this year, barring a last-minute deal by Congress to extend them.

"Unless policymakers are willing to address the underlying cost drivers the subsidies, which help individuals afford the high cost of care, are going to continue to be necessary," said Eric Linzer, president and CEO of the New York Health Plan Association, an insurance industry advocacy group that has been pushing for the subsidies to be extended.

EVOLVING LANDSCAPE

The ballooning premiums, coupled with expiring subsidies, has created what some have described as a "double whammy" for millions across the country that will not only lead to soaring prices, but rip coverage away from thousands who purchase insurance through the government exchange.

It's a situation that has created a bind for companies like MVP Health Care, which say that premium increases are necessary to keep pace with industry costs and shifting market dynamics.

State regulators approved a 7.4% rate increase for the insurer's individual plan next year and a 17.9% increase for its small group health plan - increases that reflect "the same pressures affecting plans nationwide," including rising pharmacy costs, sustained use of care and expiring subsidies, according to Michelle Golden, a spokesperson for MVP Health Care.

"As those subsidies expire, some members' net premiums will increase, and as market dynamics shift, our responsibility is to keep coverage sustainable while supporting members through the transition," she said in a statement. "As a regional, not‑for‑profit health plan, we will continue working with customers, providers, and public partners to help people find the best options for their health care needs."

Meanwhile, the cost of medical care, including provided services, insurance, drugs and equipment, has grown 121% between 2000 and 2024, outpacing other consumer goods that rose an average of 86% during that same period, according to the Peterson Center on Healthcare and Kaiser Family Foundation.

A CLOSER LOOK

Subsidies have long been part of the Affordable Care Act on a sliding scale for those earning between 100% and 400% of the federal poverty level, but were enhanced in 2021 to to reduce the maximum household contribution while eliminating the income limit.

The number of individuals across the country enrolling in health insurance through market exchanges has increased from 11.4 million in 2020 to over 24 million in 2025, according to an analysis by the Kaiser Family Foundation, which indicates that the increased benefit has opened the door for millions that couldn't afford health care prior.

"If enhanced tax credits expire, many Marketplace enrollees will continue to qualify for a smaller tax credit, while others will lose eligibility altogether and be hit by a 'double whammy' of losing their entire tax credit and being on the hook for rising premiums," the organization noted in a recent report.

The state Department of Health estimates health insurance premiums are set to increase an average of 38% for eligible consumers without the enhanced subsidies.

For an individual, that would inflate the monthly premium to an average of $414 next year, a $114 increase. A couple would see their premiums balloon to $828 per month, an increase of $228, according to the department.

Around 80,000 are expected to lose insurance all together without the subsidies, according to the department.

"As a whole, New York can expect to see significant increases in the uninsured rate if the enhanced financial assistance expires," the department said in a statement.