New Mexico health insurance officials approve 24% increase in premiums

Individual health insurance plans — sold on and off the state health insurance marketplace — will see an average rate increase of 24.4% in 2027, following approval Monday from New Mexico Office of the Superintendent of Insurance.

The increase is lower than last year's rate hike — after which premiums for individual plans spiked by an average of 36% — but it outpaces the 2027 nationwide median of 15%.

“Rising health care costs and inflation are continuing to affect consumers nationwide and New Mexico is no different," Superintendent of Insurance Alice Kane said in a statement.

Rep. Nathan Small, a Las Cruces Democrat who chairs the powerful Legislative Finance Committee, slammed the superintendent's approval of the significant increases, which come after major legislative investments earlier this year to make healthcare more — not less — affordable.

"Both policymakers and New Mexicans deserve a clear explanation of what is driving these increases, what alternatives were considered, and how our affordability investments are being utilized to keep costs down for families,” Small said in a statement.

'Shocking and deeply disappointing'

Healthcare affordability has turned into a political flash point — in New Mexico and across the U.S.

President Donald Trump has called on Congress to enact his so-called Great Healthcare Plan, which includes lowering prescription drug costs and insurance premiums. As Trump announced a new drug affordability plan Monday, reporters asked whether he thought the price of gas or the cost of healthcare would matter more to American voters in upcoming midterm elections.

"Healthcare, to me, is very important. You're talking about life. It's very big. It's very important," Trump responded.

Meanwhile, much of New Mexico lawmakers' attention during the 2026 legislative session focused on healthcare policy. That included enacting House Bill 4, which increased revenue distributions from the state Health Care Affordability Fund.

The fund is one of the major tools New Mexico uses to subsidize the cost of premiums for individual plans purchased through BeWell, the state insurance exchange established by the Affordable Care Act. Absent any changes in program costs or eligibility, however, the Health Care Affordability Fund may be insolvent by fiscal year 2028, according to a Legislative Finance Committee analysis released Aug. 25.

Small called the Legislature's actions earlier this year "nation-leading investments" for healthcare affordability that seem contradictory to the Office of the Superintendent of Insurance's approval of premium increases nearly 10 percentage points above the national average.

"The lawmakers who prioritized funding specifically to keep health insurance costs down should have been consulted before this marked increase was approved in a silo," Small said. "This approval is shocking and deeply disappointing, since our investments were intended to help families afford care, not increase profit margins for insurance companies."

'Actuarially sound' choice

Despite the steep increase, Kane insisted the 2027 rates approved by her office are well founded.

"I can assure you that the rates for all the insurance companies are actuarially sound, nondiscriminatory, and transparent," she said.

Several factors have contributed to rising insurance costs in recent years. Principal among them, Kane said, was New Mexico's "claims experience" — which includes both the number and the dollar amount of insurance claims in the state — in 2025, on which insurers set 2027 rates.

"The carriers are required by federal rules to use the 2025 claims experience to develop 2027 rates," Kane wrote in an email to The New Mexican.

Higher utilization — or more people receiving care — and inflation also contributed to higher medical costs, as did an increase in spending on prescription drugs. Expensive weight-loss drugs, in particular, have contributed to rising costs, according to a 2024 report from the Legislative Finance Committee.

More than 90% of BeWell enrollees are eligible for state and federal premium assistance, and financial assistance from New Mexico's Health Care Affordability Fund will continue to subsidize those costs, according to the Office of the Superintendent of Insurance.

More than 84,000 New Mexicans — a new record — sought health coverage through BeWell during open enrollment in late 2025 and early 2026. That's despite Congress' failure to continue federal subsidies for marketplace enrollees making more than 400% of the federal poverty level — equivalent to about $64,000 for an individual or $132,000 for a family of four.

New Mexico was the only state in the nation to see an increase in Affordable Care Act marketplace coverage during that open enrollment period, according to an analysis from the health research and policy organization KFF.

BeWell's next open enrollment period will begin Nov. 1 and continue through Jan. 15 with insurance plans available from Blue Cross Blue Shield of New Mexico, Presbyterian Health Plan, United Healthcare of New Mexico and Molina Health Care of New Mexico.

Kane said the Legislative Finance Committee has requested a meeting with her to discuss the 2027 rate increase.

"I look forward to this discussion," she wrote.

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