Health insurance premiums for approximately one million residents of New York will see an increase in cost in the coming year.
The administration of Governor Kathy Hochul has given approval to rate increases, averaging around 12 percent for individuals and over eight percent for small-group plans.
Despite the rise, the rate hikes are lower than the originally proposed increases of 17 percent and 19 percent that health insurers were seeking.
The State Department of Finance attributed the increases to the rising costs of medical care, such as hospital stays and the soaring prices of prescription drugs.
Health insurance premiums are the monthly payments made to an insurance company by either you or your employer. The insurance company collects premiums from all of its policyholders and utilizes those funds to cover medical claims. In addition to covering administrative expenses, the insurance company can utilize premiums to generate a profit.
Here is the press release by DFS:
“The New York State Department of Financial Services (“DFS”) today has approved health insurers’ premium rate increases for 2025, saving consumers and small businesses approximately $853 million. In the individual market, DFS reduced insurers’ requested rates 23%. In the small group market, DFS reduced insurers’ requested rates 55%. Approximately one million New Yorkers are enrolled in individual and small group plans.”
“The rising cost of medical care, including in-patient hospital stays as well as rapid increases in drug prices, continues to be the main driver of health insurance premium increases. In light of the continued increases in costs of health care and other consumer goods and services, DFS held insurers’ profit provisions to only 1.0%.”
