New York capped 2027 health insurance rate increases at 6% for individual plans and 8% for small-group plans, well below the 20.6% and 23.7% insurers requested, the state Department of Financial Services announced on Sept. 4. The decision saves roughly 850,000 enrollees a combined $1.6 billion compared with what insurers wanted to charge.
New York’s cuts stand out against a national trend of rising premiums. The median requested increase across the country for 2027 is about 15%, according to KFF and the Peterson Center on Healthcare, as insurers cite rising medical costs and the expiration of enhanced Affordable Care Act subsidies. Other states have taken similar steps to soften the increases insurers requested, though none as steep as New York’s: Connecticut, Massachusetts, Vermont, Oregon and New Mexico have all approved 2027 rates below what carriers initially sought, state regulatory filings show.
Connecticut’s insurance department, for example, cut individual-market requests from 16.2% to 11.3% and small-group requests from 17.8% to 15.1%, according to the Connecticut Mirror, reductions that still leave Connecticut policyholders facing far steeper increases than the 6% and 8% New York approved.
Insurers pushed back hard against the New York decision. Eric Linzer, president of the New York Health Plan Association, said the approved rates “fail to fully account for major factors driving premiums,” pointing to rising hospital, physician and drug prices along with new statemandated benefits and taxes. Michelle Golden of MVP Health Care and Barry Thornton II of CDPHP echoed those concerns, warning that suppressed rates could strain insurers’ ability to cover rising claims costs.
The Department of Financial Services defended its review, tying the decision to Gov. Kathy Hochul’s broader affordability push, which includes eliminating out-of-pocket costs for insulin, inhalers and lung cancer screenings under separate state initiatives. Regulators said the rate cuts reflect careful scrutiny of what insurers can justify rather than an arbitrary reduction.
Premiums have kept climbing nationally even after enhanced federal subsidies expired because insurers say the remaining pool of ACA marketplace enrollees skews sicker and costlier to cover, a dynamic known as adverse selection, as healthier consumers drop coverage when their out-of-pocket costs rise. New York’s savings work out to an average of $1,873 per enrollee compared with what insurers requested, according to the state’s calculations, breaking down to roughly $1,446 in the individual market and $1,984 in the small-group market.
What Drove Insurers’ Original Requests
Insurers pointed to several specific cost categories to justify the double-digit increases they initially sought. Excellus BlueCross BlueShield said roughly half of its requested increase stemmed from rising hospital costs, including more hip and knee surgeries, heart procedures and cancer infusion therapies, and it cited “substantial increases in the use of GLP-1 drugs,” the class of weight-loss and diabetes medications that includes Ozempic and Wegovy, according to CBS News New York.
Anthem said it was seeing increased use of higher-cost services including specialty prescription drugs, and EmblemHealth cited the expiration of enhanced federal premium tax credits as a driver of its request. Insurers also pointed to rising use of behavioral health services and emergency room care.
Which Insurers Were Cut and by How Much
The Department of Financial Services reviewed requests from 12 carriers in New York’s individual market covering about 224,000 enrollees, not counting the separate Essential Plan, a state-run program that provides low-cost or free coverage to lower-income New Yorkers who earn too much for Medicaid. Regulators approved no increase at all for CDPHP, which had requested 1.4%, and for Emblem, which had sought 26.8%. Fidelis, which requested a 28.4% increase, was approved for 8%, and Excellus, which sought 17.2%, was approved for 12.2%, according to a breakdown of the approved rates. How New York’s Review Process Works
New York is one of a smaller number of states that requires insurers to get advance approval from regulators before raising premiums, rather than simply filing new rates and using them. Under the state’s prior-approval system, the Department of Financial Services can approve, reject or modify a proposed rate if it finds the increase unreasonable, excessive or unfairly discriminatory, according to DFS’s own rate review guidance.
Regulators weigh insurers’ medical loss ratios, which measure the share of premium dollars spent on medical claims versus administrative costs and profit, along with claims history and each company’s overall financial condition. New York requires most plans to spend at least 82% of premium revenue on medical care, a stricter threshold than the 80% floor set under federal law.
A plan that fails to hit that threshold must issue rebates to policyholders, giving regulators leverage beyond the rate approval itself to push insurers toward more conservative pricing.
Advocates and Lawmakers Cheer the Decision
Consumer groups praised the rate cuts as a rare win for policyholders. The Community Service Society of New York commended Hochul and DFS Superintendent Kaitlin Asrow “for their leadership in making health insurance more affordable,” noting that regulators cut insurers’ requests by roughly 70% in the individual market and 66% in the small-group market. State Sen.
Gustavo Rivera and Assembly Member Jessica Gonzalez-Rojas had organized a letter signed by 72 elected officials earlier this year urging DFS to reject the insurers’ original rate requests as excessive, and both lawmakers pointed to the final numbers as evidence that the pressure campaign worked.
The reduced increases still leave many small businesses facing higher costs next year than they paid in 2026, even after the state’s cuts. New York’s small-group market, which covers businesses with two to 50 employees, has posted premium increases in each of the past several years as insurers cite rising claims and fewer healthy enrollees spreading the risk pool across the group.
