Some WNY consumers may see large increases in their health insurance premiums

The three dominant health plans in Western New York all requested significant rate increases for 2025 due to rising costs, particularly for hospital care and pharmaceuticals.

Highmark Western and Northeastern New York, which includes Highmark Blue Cross Blue Shield of Western New York, is seeking an average increase of 30.9% for individuals, a market in which it has almost 4,100 members. For small group plans, in which Highmark has about 36,000 members, the insurer is seeking an average increase of 19%.

Independent Health is seeking an average rate increase of 27.7% in the individual market, which has approximately 11,500 members. For small groups, in which Independent Health lists about 52,500 members, the insurer asked for a 28.1% increase.

Excellus Health Plan, which includes Univera Healthcare, is seeking an average increase of 19.5% in both the individual and small group markets. Excellus, based in Rochester, has more than 28,500 members in its individual plans and almost 139,000 small group members.

Those rate adjustments filed with the state and posted online Friday affect people who buy individual commercial health insurance and small employers with 100 or fewer full-time workers. Together, they make up a small fraction of members for most insurers.

The rate increases, which do not affect large employers with more than 100 workers, highlight upward pressure on premiums.

Other insurers with a presence in Western New York also requested increases.

This includes Fidelis, which is looking for a 9.8% increase in the individual market; MVP Health Plan, which requires an individual market increase of 19.2% and a small group increase of 9.5%; and United Healthcare, which is seeking an 8.8% increase for individuals and an 11% increase for small groups.

The average increase required by health plans in the state was 16.6% in the individual market and 18.6% for small groups.

From there, the state will evaluate the requests, gather feedback from the public and, most likely, adjust the increases downward.

Fees are usually finalized by the end of August.

While the fee requests affect a relatively small portion of each health plan’s membership, the proposed increases still put the spotlight on the rising cost of health care.

In a statement, Highmark Western and Northeastern New York — the Buffalo arm of Pittsburgh-based Highmark Health — said its proposed charges for individual and small-batch products next year are driven by escalating pharmaceutical and hospital prices, as well as from regulatory mandates. , taxes and fees. Fee requests filed with the state affect about 10% of Highmark’s members.

“We recognize that rising medical costs are a huge burden on small businesses and individuals,” Highmark said, noting that there have been more than $250 million in losses in the individual and small group sectors over the past five years. last. The company said it spends more than 89 cents of every dollar of revenue on its members’ medical care.

Rich Argentieri, chief sales and marketing officer at Independent Health, said the insurer’s rate adjustments “reflect the continuing post-pandemic challenges that are impacting health care costs across our industry.” Individual commercial plans represent 3% of Independent Health’s membership, while small groups are about 15%.

Specifically, he noted that the median average price for new prescription drugs has increased by 67% over the past three years, a trend that is expected to continue as emerging cell and gene therapies enter the market. Independent Health has seen increases in prescription drug costs in high-cost categories such as diabetes and weight loss, oncology, immunotherapy and rare diseases.

“Since 90 cents of every premium dollar is used to pay members’ medical and prescription costs, rate adjustments are a direct result of these increases: It’s cause and effect,” Argentieri said.

Univera also said its premium rates are a result of the cost of medical care and prescription drugs, noting that 93 cents of every premium dollar collected last year went toward members’ medical care. Its rate adjustments submitted to the state would affect about 11% of its members.

The health plan said more than half of its rate increase request is due to hospital costs, with more upstate New Yorkers going to the hospital for serious and high-cost procedures such as cancer care and transplants.

“Prices generally continue to rise,” Univera officials said. “Rising prescription drug costs and increased outpatient services such as hip and knee surgeries are also affecting rates.”

All three major local health plans reported financial losses last year.

Highmark’s local subsidiary reported a net loss of $21 million on revenue of $3.1 billion last year, while Independent Health posted a net loss of about $193 million on revenue of $2.3 billion. Excellus, which includes Univera, reported a net loss of $23 million on revenue of $6.6 billion.

Health plans have hundreds of millions of dollars in state-mandated reserves, which help absorb losses and maintain financial stability for years to come.

Insurers must send affected customers a notice about a proposed premium rate increase filed with the state, alerting consumers that an application has been submitted and that they can submit comments about the proposed adjustment.

Those wishing to comment during a 30-day window may submit their comments online through the state Department of Financial Services portal or by mail to: New York State Department of Financial Services, Bureau of Health-Regulations of Premium rates, One Commerce Plaza, Albany, NY 12257.

Comments from the public can affect the state’s review of each fee request. In that review, the Department of Financial Services evaluates the insurer’s applications and underlying calculations to “ensure that rate increases are justified and not excessive,” according to its website.

By late summer, the department will approve or lower each insurer’s proposed rates for 2025 — a process that almost always results in downward adjustments.

For example, last August 31, the department announced that it cut insurers’ required rates for 2024 by 44% in the individual market and by 52% for small groups, collectively saving more than 1 million New Yorkers enrolled in those plans nearly 732 million dollars. . Even after these adjustments, however, many health plans — including the three dominant local insurers — posted double-digit percentage increases.