New York approves small, individual insurance plan rate hikes for 2027

ALBANY — The state Department of Financial Services has authorized the next round of health insurance premium rates for 2027, allowing companies to hike premiums by between 6% and 8%.

On Friday, DFS announced that it had finished the prior approval process for health insurance rates for individual and small-group plans. Under state law, the agency has the power to approve, deny or modify the rate structures that health insurers in New York plan to set for their customers, with the exception of some large group and Medicare Advantage plans.

According to DFS, insurers had proposed an average rate hike of 20.6% for individual coverage plans including those purchased through the state’s healthcare exchange. Instead, an average increase of 6% was approved across the 12 companies that offer individual plans. In total, DFS projects that to cut about $1.6 billion out of total premium payments across all companies next year.

rates vary by company

The actual new rates vary by company. In the individual market, CDPHP asked for a 1.4% rate hike next year, but DFS approved no change. Emblem requested a 26.8% increase, and also saw no change approved. Fidelis applied for a 28.4% rate hike and was granted an 8% increase, while Excellus asked for a 17.2% increase and was granted a 12.2% increase.

According to DFS, about 224,000 New Yorkers are enrolled in individual plans, not including the Essential Plan, the expanded Medicaid option offered to qualified low-income New Yorkers.

In the small group market, which covers employer-based plans with fewer than 100 employees, 11 insurers asked for an average rate hike of 23.7%, but the final approvals average out to 8%.

CDPHP UBI requested a 10.1% hike and was approved for a 3.6% increase, and CDPHP asked for a 14.1% increase and was approved for a 9.7% rate hike.

Emblem requested a 14.2% increase but was given a new approved rate that is lower than their current rate; the company must cut rates by 0.7% next year.

MVP Health Plan requested a 19.6% rate hike and was approved for a 13.6% increase, while MVP Health Service Corp. asked for a 12% increase and was approved for a 5.6% rate hike.

According to DFS, rate changes are approved based on a variety of factors including the insurers’ financial history, rate history, profit margins, as well as utilization rates and projected use trends. New York law also requires that insurers provide a “medical loss ratio” of at least 82%, meaning that at least 82% of all money paid in premiums is going toward paying claims and at most 18% is going to administrative costs and profits for the insurer.

In a statement Friday morning, the state Health Plan Association, which represents insurance companies, said that DFS had failed to accurately assess company financial situations and the cost hikes across the healthcare sector.

“The rates the Department of Financial Services approved fail to fully account for the major factors driving premiums — significant increases in the prices hospitals, providers and drug companies charge, new mandated benefits and taxes on health insurance,” the group said in a joint statement. “New York’s health care costs are among the highest in the country and the premiums health plans submitted in May reflect that reality. Suppressing rates in the name of affordability does nothing to contain the cost of care. Instead, it ignores the ongoing escalation of provider and pharmaceutical prices. With consumers already facing significant disruption due to federal actions, these rates make it increasingly challenging for health plans operating in the individual and small group markets and risk undermining the stability of the marketplace.”

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