Washington small business owners face major health insurance hike: 'Off the charts'

May 29—Washington's small business owners, and those who are self-employed, could pay much steeper prices for health insurance in 2026 based on requested hikes from the 14 companies that provide coverage in the state.

The companies provide premiums through what's called the Individual Health Insurance Market. Combined, they are seeking to raise their premiums by about 21.2%. Those rates are regulated by the state Office of the Insurance Commissioner, which must officially sign off on the increases.

Part of the reason for the steep increases comes from tax credits, which helped subsidize insurance for about 300,000 state workers who use the individual insurance market, set to expire on Dec. 31, 2025, unless they are extended by Congress.

"These tax credits are how many people afford critical coverage that protects themselves and their families," Insurance Commissioner Patty Kuderer said in the release. "I know many members of Congress understand this and hopefully, they will prevail in these negotiations. Thousands of people in Washington state and millions across the country depend on the individual market and can't afford to see prices rise unnecessarily."

The Enhanced Advance Premium Tax Credits were created under the American Rescue Plan Act in 2021 and extended through 2025 by the Inflation Reduction Act to help people pay for insurance. It applied to those making up to $62,600 a year and for many more who made less than that, according to the release.

According to the Washington Health Benefit Exchange, as many as 80,000 state residents will drop coverage if they lose that subsidy.

Aaron VanTuyl, spokesman for the Office of the Insurance Commissioner, said those projected losses were part of the reason companies are seeking higher premiums, to offset the potential loss of so many customers.

He said the sought-after premium increase is about double the amount approved for the same companies last year.

The insurance companies sought a hike of 11.3%, and the office of insurance commissioner eventually approved a 10.7% increase.

He noted that the increases were only for those plans in the Individual Health Insurance Market. Those insurance plans offered through private employers, for which most state employees work under, are federally regulated.

Plans for public employees and teachers are regulated by the Washington State Health Care Authority.

As for the proposed hikes for self-employed and small companies, VanTuyl said the request is just the first step of a long process.

"They won't be approved for a while yet," he said. "The filings have to be determined that they are justified and whether the numbers make sense. That's a fairly large process."

Still, if approved, it would add yet another cost increase to small businesses already dealing with the effects of inflation and uncertainty from always-changing tariff policies, said Greg Deckard, CEO and chairman of Spokane-based State Bank Northwest.

"That's off the charts," Deckard said of the proposed hikes. "That's triple of what we are seeing form our group insurance. That's going to create a hardship and a lot of uninsured people."

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