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Key Takeaways
ARTICLE | Preliminary Health Insurance Premium Rate Increases for 2025
Preliminary rate changes for 2025 for small group health insurance policy premiums through exchanges have started to be filed.
For context, the rate at which US healthcare expenditures are rising is expected to hit a 13 year high next year, with data from PwC indicating that medical costs are set to rise by about 8% for group coverage (7.5% for individual coverage), which is half a point above the 2024 growth rates and up significantly from a recent low of 5.5% growth in medical costs recorded in 2017.
At this stage in the process, these proposed rate changes are still open for public comment in many cases and are usually subject to further approval by in-state agencies that cover these insurance-related matters before the changes can be enacted.
Although these rates are not yet finalized, preliminary rates will often pretty closely mirror final rates.
While these proposed rates are not the exact same rates that companies can ultimately get if they are self-funding their employee insurance plans, these rates will usually correlate fairly tightly with the rates that self-funding companies can expect as the employee demographic and healthcare utilization patterns are similar in a given geography.
Here are the proposed rate changes for 2025 plans from all states that have released this information to date.
Individual health insurance plan premiums on the exchange are preliminarily set to decrease on (unweighted) average by -3.1% in 2025, while small group plan rates are proposed to climb by an unweighted average of 7.41%.
The largest average rate decrease for individual policies was proposed by Celtic Insurance Co. at - 7.28%, while the smallest increase in small group plan rates was 4.96%, requested by Blue Cross Blue Shield of Alabama.
The largest individual policy average rate increase was proposed by UnitedHealthcare Insurance Co. with a meager rate increase of just 0.55% on average, while VIVA Health requested the largest average rate increase among small group plans at 14.95%.
Health insurance premiums in Alaska are currently set to climb by about 17.1% on average for individual plans and plus 11.71% on average unweighted for small group plans next year.
Premera Blue Cross Blue Shield of AK requested the smallest average rate increase for individual policies at 16.26% on average, while UnitedHealthcare Insurance Co. requested the smallest average rate increase for small group plans at 8.65%.
Moda Assurance Co. made the largest requested average rate increase for individual plans among carriers at 19.63%, and the largest average rate increase requested for small group plans was Moda Health Plan, Inc. with an average premium rate increase of 14.77%.
Insurance carriers requesting rate increases largely attribute the need for those increases to inflation in medical/pharmacy costs and utilization.
Requests to increase premiums for individual and small group health insurance plans through the exchange in 2025 average to about 4.2% for individual plans and about 9.6% for small group plans.
One insurance carrier in Arkansas - QCA Health Plan, Inc. - proposed a decrease of 2% on average for individual policy premiums, while the smallest increase for small group plans was QualChoice Life and Health Ins. Co. Inc. which requested an average rate increase of 4.53%.
USAble HMO Inc. (Octave) requested the largest average rate increase for individual policies at 8.57%. while UnitedHealthcare Insurance Company had the largest small group plan premium rate hike at 15.98%.
Individual and small group health insurance plan premiums via the exchange are currently slated to increase an average of 8.3% in 2025, which is down from 12.4% in 2024. Small group plan rate hike requests average to about 11.9%.
Rate increases were requested by 8 health insurance carriers in Connecticut and are presently under review by the Connecticut Insurance Department, although the public comment period has closed.
CTCare Benefits requested the smallest average rate increase for individual policies at 7.4% while Oxford Health Plans CT had the smallest small group plan premium rate hike at 5.1%.
The largest requested average rate increase for individual plans was made by CTCare Insurance Co. at 12.5%, and the largest average rate increase requested for small group plans was Anthem Health Plans with an average premium rate increase of 13.6%.
The carriers making these requests attribute the increases to overall trends, higher than expected COVID-19 expenses, and the unwinding of Medicaid.
Insurance carriers have proposed increasing Individual and small group health insurance plan premiums via the exchange in 2025 by 13.3% and 8%, respectively.
In the individual market, one carrier proposed reducing premiums by 14%, while the smallest rate increase proposal for the group market was Highmark BCBSD at 8%.
Aetna Health requested the largest average rate increase for individual policies at 34.53%. while UnitedHealthcare had the largest small group plan premium rate hike at 18.2%.
Individual and small group health insurance plan premiums are currently slated to increase an average of 6.6% and 9.3% in 2025, respectively.
Mountain Health Co-Op proposed decreasing premiums for individual policies by 2.7% while PacificSource Health Plans requested the smallest premium rate hike among carriers with at least 1% market share for small group plans at 4%.
The largest requested average rate increase for individual plans was made by Regence Blue Shield of Idaho at 11.9%, and the largest average rate increase requested for small group plans was UnitedHealth Insurance Co. with an average premium rate increase of 13%.
Carriers are attributing rate increases in Idaho to health claims paid outpacing premiums collected.
Requests to increase premium rates in 2025 for individual health insurance plans in Illinois average to about 4.6%, while the average proposed rate increase to small group plans is an unweighted 9.5%.
Molina Healthcare of IL, Inc. requested the smallest average rate increase for individual policies at 1.6% on average, while MercyCare HMO requested the smallest average rate increase for small group plans at 6.52%, but it is unclear how much market share that MercyCare HMO serves.
Oscar Health Plan, Inc. made the largest requested average rate increase for individual plans among carriers at 19.9%, and the largest average rate increase requested for small group plans was Health Alliance Medical Plans, Inc. with an average premium rate increase of 19.9%.
Insurance carriers expect to decrease policy premium expenses for individual health insurance plans through the exchange by an average of - 1.5% in 2025, although the majority of plans are requesting rate increases. Small group plan rates are expected to rise by about 8%.
Coordinated Care Corporation proposed the largest average rate decrease for individual policies at -4.3%, while UnitedHealthcare Insurance Co. proposed the smallest increase for small group policies at 6.54%.
Aetna Health inc. requested the largest average premium rate increase request for individual policies at 10.8%, while Physicians Health Plan of N. Indiana proposed the largest average rate hike for small group premiums at 9.45%.
Requests to increase premiums for individual and small group health insurance plans via the exchange in 2025 average to about 14.2% and 14.8%, respectively.
The smallest requested average rate increase for individual plans was made by Taro Health Plan of Maine, Inc. at 3.9%, and the smallest average rate increase for small group plans among carriers with at least 1% market share was United Health Insurance with an average premium rate increase of 5.3%.
Harvard Pilgrim Healthcare requested the largest average rate increase for individual policies at 15.8%. while Maine Community Health Options had the largest small group plan premium rate hike at 19.6%.
Individual exchange-acquired health insurance plan premiums are currently slated to increase an average of 6.7% in 2025 - with average individual policy rate increase requests ranging from 4.7% to 14.2% - while small group premiums are expected to increase by about 6.11%.
CareFirst BlueChoice requested the smallest average rate increase for both individual policies and small group policies at 4.7% and 4.9%, respectively.
CareFirst (GHMSI) and CareFirst of Maryland, Inc. shared the largest average premium rate increase request for individual policies, as well, at 14.2%, while Aetna Life Insurance Co. proposed the largest rate hike for small group premiums at 23%.
Requests to increase premiums for individual and small group exchange health insurance plans in 2025 average to about 8.4%.
Fallon Community Health Plan Inc. requested the smallest average rate increase for both individual and small group policies at 1.4% each.
The largest requested average rate increase for individual plans among carriers with at least 1% market share was made by Tufts Health Public Plans at 10.4%, and the largest average rate increase requested for small group plans was UnitedHealthcare Insurance Co. with an average premium rate increase of 12.4%.
Rate increases are being attributed primarily to rising hospital and prescription drug costs, although other contributing factors include a population that is aging, risk analysis, general trends, an improved user experience, and use of certain inpatient and outpatient services.
Individual and small group exchange health insurance plan premiums are currently slated to increase an average of 10.5% and 11.2%, respectively, in 2025.
Meridian Health Plan Inc. requested the smallest average rate increase (3.1%) among carriers with at least 1% market share for individual policies, while UnitedHealthInsurance Co. had the smallest small group plan premium rate hike at 4.7%.
Priority Health requested the largest average rate increase for both individual and small group plans was made by Priority Health at 18.89% and 13.2%, respectively.
According to the insurers requesting them, these rate increases are primarily being driven by inflation in medical costs, risk adjustment, changes to plan benefits, and to more accurately reflect past experience.
Individual health insurance plan premiums are preliminarily slated to increase an average of about 8.7% in 2025. Small group plan premium hike requests have an unweighted average of about 9.4%.
Medica Insurance Co. requested the smallest average rate increase for both individual and small group policies at 1.95% and 3.71%, respectively.
The largest requested average rate increase for individual plans was made by Blue Plus (HMO Minnesota) at 12.75%, and the largest average rate increase requested for small group plans was Quartz (formerly known as Gundersen) with an average premium rate increase of 15.82%.
Individual health insurance plan premiums are currently slated to increase an average of about 16.2% in 2025 while small group plans are slated to increase by 19%, although rate increase proposals are currently being reviewed by the New York Department of Financial Services and often result in significantly reduced rates from the initial preliminary figures.
UnitedHealthcare of New York requested the smallest average rate increase for individual policies at 8.8% while MVP Health Plan, Inc. had the smallest small group plan premium rate hike at 9.5%.
The largest requested average rate increase for individual plans was made by HIP of Greater New York at 51%, and the largest average rate increase requested for small group plans was Independent Health Benefits Corporation with an average premium rate increase of 28.1%.
The premiums for individual and small group health insurance plans from the exchanges are currently slated to increase an average of 14.9% and 15.1% in 2025, respectively.
For BlueCross Blue Shield plans in Vermont, individual policy rates are expected to climb by 16.3%, while small group rates are expected to climb by 19.1%.
MVP Health Plans are expected to increase between 2.7% and 34.3%, with an average increase of 11.7%.
These rate increases are largely attributed to increased silver loading and premium alignment.
The premiums for individual and small group health insurance plans from the exchanges are currently slated to increase an average of 11.3% in 2025, which are presently under review by the Washington Insurance Department.
Of the 13 health insurance carriers that have filed rate increase requests in Washington, the smallest increase was the Community Health Plan of Washington with a 4.5% increase, and the largest rate increase was requested by Regence Blue Shield which requested an increase of 23.8%.
As a reminder, some of these rate increases are likely still to be slashed by state regulatory bodies, so the sticker shock may not ultimately be as bad in some places as it currently appears to be.
Also, self-funding companies are probably going to see somewhat lower rates than the finalized exchange plan rates on average, which will also help a little on the bottom line.
That said, while there rates are still potentially in flux, the ultimate rate increases tend to correlate fairly strongly with preliminary rates.
On the other hand, these rate increases represent averages across all insurance carriers in a given state (weighted when sufficient data is available), so it is of course a good idea to go ahead and take a look at the premium rate adjustments your insurance carrier is proposing, which may not be final yet but will more accurately reflect the approximate potential rate increases your organization may be facing next year and will help you better prepare in advance for the additional expense.
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