WA approves double-digit rate hike for individual health insurance plans

The state insurance commissioner on Wednesday approved a 22.2% average rate increase for individual health plans in 2027 — an announcement that set off alarm bells from consumer advocates and policymakers over the ballooning cost of coverage.

Washingtonians who buy their own insurance have been hit by big back-to-back rate hikes over the past few years. Next year's jump will mark the highest increase in almost a decade.

“Families shouldn’t experience sticker shock every year when shopping for health insurance, Commissioner Patty Kuderer wrote in the announcement, "but these pressures are likely to continue without changes that slow healthcare spending, improve affordability and keep more people covered.”

Almost 250,000 people in Washington are enrolled in individual health plans, which provide coverage to people who do not get insurance through an employer or public programs. Many are self-employed, or they work for companies that don't offer health insurance; some are people who retired before the age of 65, and are not yet eligible for Medicare.

Insurers increase their rates in response to higher healthcare costs, which can be driven by many factors, including inflation, drug price increases, labor shortages, consolidation among healthcare providers and more.

Policymakers warn that higher rates can lead some people — especially healthy people — to drop coverage. This leaves the remaining pool of insured people to be relatively sicker, further driving up costs.

Earlier this year, approximately 37,000 fewer people enrolled in individual health plans after the Republican-led Congress failed to renew tax credits that previously helped middle-income households pay for premiums.

"Costs are skyrocketing while patients are losing health coverage — and it didn’t have to be this way," wrote Sen. Patty Murray in a statement Wednesday, in response to the approved rate increases.

Consumer advocates warn that high rate increases mean that people who buy their own insurance will continue to be squeezed financially.

"We have unrestrained health costs that are driving an affordability crisis," said Emily Brice, co-executive director of advocacy for Northwest Health Law Advocates, an organization that aims to increase access to healthcare. "This is truly staggering at this point."

Brice is worried about people who may be forced to make difficult choices, such as having to choose between health insurance and other necessities like housing or food — a dynamic she referred to as "survival math.

Wednesday's announcement means that Washingtonians are now facing some of the highest rate increases in the country. Nationally, the median proposed rate increase for 2027 is 15%, according to a recent analysis of insurer rate requests from healthcare policy researchers.

Twelve insurers are set to sell individual health plans through the state health benefit exchange next year. In the spring, they had requested an average rate increase of 22.4%. The insurance commissioner is legally required to approve rate increases requested by insurers, as long as they are justified.

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