Premium hikes of up to 35% for individual health plans approved by New York State

About 1 million New Yorkers' monthly health insurance premiums will jump as much as 35% next year under rate increases announced by the state on Friday.

The state Department of Financial Services issued limits on how much roughly a dozen health insurers can raise premiums — or monthly subscription fees — for plans covering individual households and employers with up to 100 workers.

The state agency authorized an average monthly premium bump of 12.7% for individual plans, which cover about 260,000 New Yorkers and can be purchased on and off the state health exchange.

DFS permitted an average monthly premium increase of 8.4% for small group plans, which cover about 700,000 New Yorkers.

The agency has yet to decide how much carriers can raise costs for the subset of larger health insurance plans and supplemental Medicare policies DFS oversees.

The agency declined to have a spokesperson respond to questions about why it approved rate increases. 

In its announcement, DFS cited the growing costs of hospital stays, drug prices and other medical care. The memo said regulators anticipate that carriers would have relatively modest margins, noting "DFS held insurers’ profit provisions to only 1.0%."

The decision will bring the average monthly premium for individual plans statewide from $750 to $845, with rates varying based on insurance carrier, household composition, region and other factors, DFS said.

Although premium increases weren't allowed for UnitedHealthcare of New York, DFS approved double-digit raises for nearly all other carriers, including Emblem, which will hike premiums an average of 35.6%. 

Emblem paid more in claims than it collected in premiums for its individual health plans in 2022 and 2023, according to its application to DFS.

But the health advocacy coalition, Health Care For All New York, said the carrier's forecasts showed it anticipated having a harder time containing the cost of care than its peers. Emblem also plans to pay more for administrative operations and needing funds for prenatal vitamins — a roughly $250 obligation that didn't appear to pose financial concerns for other insurers, the coalition said. 

"The Department should require carriers like Emblem to reexamine its own operational practices that make it a market outlier instead of making its enrollees bear such a large rate increase," Health Care For All New York said in its testimony. 

Emblem spokeswoman Kimberly Kann said premium rates were set based on cost trends and how much care patients need.

"We remain extremely mindful of the impact that rate increases have on our members," Kann said in a statement. "We work closely with hospitals, doctors, and other medical providers to help control costs."

DFS authorized rate increases that will bring the average monthly premium for small group plans statewide from $1,000 to $1,084, the agency said.

Regulators kept average increases to single digits for five carriers, but allowed rate increases that average about 20% for two upstate insurers. Premium costs will cap out closer to 10% or 11% for many insurers operating on Long Island and the larger metropolitan area.

DFS noted in its announcement that many individuals and some employers could receive tax credits to lower the cost of their premiums. 

Health plans need more funding because hospitals and health systems are demanding price increases and the cost of prescription drugs is skyrocketing, said Eric Linzer, president and CEO of the New York Health Plan Association, a trade group for health insurers. 

"The proposed premium rates health plans submitted in May reflected the high cost of health care in New York," Linzer said in a statement. "Unfortunately, the final approved rates fail to fully recognize these factors."

By Sarina Trangle

sarina.trangle@newsday.comSarinaTrangle

Sarina Trangle covers affordability and cost of living issues and other business topics. She previously worked as an editor and reporter at amNewYork.