In 2026, numerous consumers and small businesses in the state will experience significant health insurance increases, with double-digit percentage hikes driven by rising healthcare costs, hospital expenses, and soaring drug prices.
For individual markets, insurers asked for an average rate hike of 13.5%. However, state regulators reduced this to 7.1%, as announced by the Financial Services Department. In the small group market, the average requested increase was a staggering 24%, but was adjusted down to 13% by the state.
These rate changes impact those purchasing individual commercial health insurance and small employers with up to 100 full-time employees. Notably, large employers with more than 100 employees won’t face these increases. Still, this trend underscores the ongoing tension in health insurance premiums that seems to become more predictable every year.
The latest state approvals reflect the largest health plans in western New York.
- Highmark West and Northeast New York, which includes Highmark Blue Cross Blue Shield, initially sought an average increase of 23.9% for around 3,200 individual members, but the state allowed for a 19.4% increase. For the small group plan covering 33,900 members, Highmark’s request for an 18% increase was lowered to 11.4%.
- Independent Health pushed for a hefty average increase of 38.4% in individual markets. With about 7,300 members, the state approved a 20.8% increase. In the small group market, where Independent Health has around 44,200 members, the requested 19% hike was reduced to 14.4%.
- Excellus Health Plan, including Univara Healthcare, asked for an average increase of 24.8% in individual markets but received approval for a 20.7% rise. Their small group request of a 19.6% average increase was cut to 15%. Exceres, based in Rochester, has over 21,000 individual members and nearly 133,000 small group members.
After receiving requests from insurance companies, the state assesses them and gathers public feedback before finalizing rates. The new rates are set to go into effect on January 1.
Highmark and Independent Health, the two largest insurers in the region, reported losses in 2024. Independent Health noted a $66 million net loss on $2.5 billion in revenue, while Highmark recorded a $140 million loss against $3 billion in revenue.
On August 19, Independent Health announced it would be eliminating 59 positions, which represents less than 4% of its workforce, as part of cost-cutting measures.
Last year, Excellus managed to post a profit of $25.6 million, benefiting from a strong investment performance that balanced out an operating loss of $163 million.
Earlier this year, when seeking a rate hike, health insurers in western New York indicated that the increase was necessary to manage the anticipated rise in healthcare costs for 2026.
Eric Linzer, president and CEO of the New York Health Planning Association, commented that New York’s healthcare costs are the highest in the nation, as reflected in the fee requests submitted by insurers. His organization represents 20 managed care health plans.
“Affordability is the biggest issue for individuals and small businesses,” Linzer stated.
Other insurers in western New York have also experienced rate increases.
Fidelis, for instance, requested an 8.1% increase in individual markets but was granted only a 2.9% rise. MVP Health Plan, which sought an 8% bump for individuals and 21.5% for small groups, ended up with a 7.4% increase in individual markets and 17.9% in small groups.
Currently, around 240,000 New Yorkers are enrolled in individual commercial plans, while 685,000 are registered in small group plans.
By lowering the insurance companies’ requested fees by 47.4% for individual markets, the state claims to have saved consumers about $148.2 million. Additionally, cutting demands by 45.8% in the small group market reportedly saved $818.8 million.
