The three dominant health plans in Western New York requested double-digit percentage rate increases for 2026 as the cost of medical care and pharmaceuticals continues to soar.

The rate requests submitted to the state, and posted online this week, affect people who buy individual commercial health insurance and small employers with 100 or fewer full-time workers. Together, they comprise a small slice of members for most insurers.

The rate increases, which do not affect large employers with more than 100 workers, highlight the upward pressure on premiums and how consumers continue to pay more for health insurance.

Highmark Western and Northeastern New York, which includes Highmark Blue Cross Blue Shield of Western New York, is requesting an average increase of 23.9% for individuals, a market in which it has about 3,200 members. For small group plans, in which Highmark has 33,900 members, the insurer seeks an average increase of 18%.

Independent Health is requesting an average rate increase of 38.4% in the individual market, where it has roughly 7,300 members. On the small groups, in which Independent Health lists about 44,200 members, the insurer requested an increase of 19%.

Excellus Health Plan, which includes Univera Healthcare, is seeking an average rate increase of 24.8% in the individual market and a hike of 19.6% for small groups. Excellus, based in Rochester, has more than 21,000 members in its individual plans and almost 133,000 small group members.

The average increase requested by health plans in the state was 13.5% in the individual market and 24% for small groups.

From here, the state Department of Financial Services will evaluate the requests, gather public feedback and, most likely, adjust the increases downward.

Rates are typically finalized by late August. The rates then go into effect Jan. 1.

Double-digit health insurance rate increases – some over 20% – coming to WNY The state on Friday disclosed the approved health insurance rates for 2025. Many consumers and small businesses will be looking at double-digit increases that, in some cases, will top 20%.

The region’s two largest insurers, Highmark and Independent Health, reported financial losses in 2024. Independent Health had a net loss last year of $66 million on revenues of $2.5 billion, while Highmark reported a net loss of $140 million on revenue of $3 billion. Excellus posted a profit of $25.6 million due to strong investment results that offset a $163 million operating loss.

For Amherst-based Independent Health, small groups and individuals represent about 15% of the insurer’s total membership.

Independent Health spokesperson Frank J. Sava said that more than 90 cents of every premium dollar is used to pay for member medical and prescription costs, meaning the rate adjustments are a result of health care cost increases.

In particular, he said, prescription drug costs continue to increase, driven by high-cost specialty medications for weight loss, oncology, immunotherapy and rare diseases. Sava said pharmaceutical costs account for the largest portion of the members’ premium dollar, at 33%. Just a decade ago, Sava said, prescription drug costs accounted for 15% of members’ premium dollars.

“We are making headway in addressing pharmacy costs and utilization where we can, but the unchecked increases are outpacing our efforts,” Sava said. “Rising pharmaceutical costs not only impacts our members and employer groups, but also providers, as prescription drugs continue to shift more and more of the premium dollar from local physicians and providers to Big Pharma.”

At Excellus, which includes Univera, the proposed rate changes affect about 10% of its members.

Excellus said about half of the rate increase requests are due to rising hospital costs, particularly increases in hip and knee surgeries, heart procedures and cancer infusion therapies. Prescription drugs also are big drivers, with the health plan’s spending on GLP-1 drugs (such as Ozempic and Wegovy) on track to increase by more than 50% between 2024 and 2026.

“We recognize that in today’s environment, any increase in cost is challenging” Univera President Art Wingerter said in a statement. “When considering ways to address rising costs, our members are our priority. That’s why we’re advancing initiatives that promote better health outcomes, affordability, and medication safety, and are actively working with our local health care system to address these rising costs.”

The proposed rate hikes for individuals and small groups affect less than 10% of Highmark’s Western and Northeastern New York members. In a statement, Highmark said the rates reflect the rapidly rising costs of medical care and prescription drugs.

“These adjustments are necessary to cover the anticipated rising cost of our members’ care in 2026,” Highmark said. “Next year, we anticipate costs will continue to rise due to increased care for our members, expanded use of specialty drugs, and new mandates, taxes, and fees.”

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

That includes Fidelis, which is requesting an 8.1% increase in the individual market, and MVP Health Plan, which is asking for an individual market bump of 8% and a small group increase of 21.5%.

Last year, the average increase requested by health plans in the state was 16.6% in the individual market and 18.6% for small groups. The state lowered those rate increases to 12.7% for individuals and 8.4% for small groups, which went into effect in January.

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 send comments in about the planned adjustment.

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

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

At a press conference, Gov. Dan McKee highlighted initiatives that seek to solve RI’s primary care crisis.

EOHHS Secretary Richard Charest said the state might have been able to help save Anchor Medical had it been notified earlier of the physician group’s financial troubles.

Attorney General Peter Neronha, a regular critic of McKee, was not impressed with the governor’s announcements.

PROVIDENCE – When Anchor Medical Associates, a primary care physician group with locations in Lincoln, Providence, and Warwick, suddenly announced it was closing this summer, leaving 25,000 patients in a lurch, many observers used the word “crisis” to describe the situation.

“Rhode Island’s health care crisis is very real, and Anchor’s closure is not an isolated incident. It’s a symptom of a system in crisis,” said Howard Dulude, interim president of the Hospital Association of Rhode Island.

Now, as Rhode Island grapples with a shortage of primary care providers, low reimbursement rates and increasing costs of health care, the state is rolling out a set of initiatives that seek to address the primary care crisis.

The initiatives were highlighted at a press conference by Gov. Dan McKee at the State House on Tuesday, April 29. McKee was joined by Richard Charest, secretary of the Executive Office of Health and Human Services; Jerry Larkin, director of the Department of Health; Cory King, Rhode Island’s health insurance commissioner; and Kristin Pono Sousa, director of Rhode Island’s Medicaid program.

The initiatives include a budget amendment to accelerate the rate review of Medicaid reimbursement rates in the state. The review usually happens biannually, King explained, but at the behest of McKee the process is being moved up a year. About one-third of Rhode Islanders are insured by Medicaid, and low Medicaid reimbursement rates are a recurring problem cited by primary care providers.

Also highlighted were new rules, previously announced by the Office of the Health Insurance Commissioner, requiring insurers to increase primary care spending and reduce prior authorization requirements. Blue Cross Blue Shield of Rhode Island, the state’s largest private insurer, already announced it will increase its payments for primary care by $40 million by 2028 and cut prior authorization by 65%.

Financial incentives are being considered, too. McKee announced that $5 million in grants will be made available for primary care practices that expand their patient panels, recruit new physicians or providers such as nurse practitioners and physician assistants, and agree to serve Medicaid patients for the first time. McKee’s 2026 budget also includes an expansion to a loan repayment program for health professionals who commit to working in Rhode Island for at least two years. According to the governor’s office, 91% of recipients who received loan repayment between 2013 and 2023 continued to practice in the state after their service obligation was complete.

Could Anchor Medical have been saved?

In response to Anchor Medical’s closing, McKee announced a new budget amendment for fiscal oversight over the state’s health care system. The proposed amendment will require medical facilities to submit quarterly financial reports to the state.

Asked whether the state could have intervened in Anchor Medical’s closure, Charest said, “If we had been notified earlier, we may have been able to stabilize that practice.”

Questioned by reporters, Charest declined to go into specifics about Anchor Medical’s situation, but he said the practice had reached a place where it had no liquidity to cover physician salaries.

Attorney general not impressed with McKee announcements

In a statement released after McKee’s press conference, Attorney General Peter Neronha – a regular critic of the governor – called the initiatives a “slapdash response to political and public pressure” due to the impending closure of Anchor Medical.

“Our residents don’t want bureaucratic nonsense and Tuesday-morning lip-service; they want and need quality health care. We need a consistent data-driven, multi-pronged, and innovative approach now that will help us achieve long-term structural reform and will immediately help us avoid the worst of this crisis before it’s too late. Because it almost is,” Neronha said.

Neronha added that in the coming weeks, his office will release findings from studies on the state of health care in Rhode Island and announce a new initiative to offer solutions.

Insurers argue they have little choice but to raise rates in the face of growing costs charged by providers and the pharmaceutical industry, while small business leaders warned the hikes will saddle members with even more strain at a time when Massachusetts is becoming increasingly unaffordable.

The Division of Insurance in the coming weeks will review 2026 merged market rates submitted by carriers, which average out to a 13.4 percent hike that’s more than twice as large as the 4.8 percent growth regulators approved two years ago.

Hundreds of thousands of small business employees and individuals could face significantly higher health insurance premiums next year under proposed rate increases that critics warn would add another crushing weight to employers and residents already struggling to manage high costs.

Gov. Maura Healey, too, linked the merged market proposal to broader economic concerns.

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“Health care costs, as reflected in the proposed rates filed by health insurers, are simply unsustainable. I directed our Insurance Commissioner to closely scrutinize these filings as part of the rate review process,” Healey said in a statement to the News Service. “What is clear is that we all must do much more to lower the cost of health care in this state.”

Eight major health insurance providers late last month submitted the proposed rates they want to charge next year in the merged market, which combines under one umbrella individual insurance and small group insurance for businesses with no more than 50 eligible employees.

The new annual weighted average base rates would all increase by varying amounts, with Fallon Community Health Plan’s 9.9 percent the lowest and Boston Medical Center Health Plan’s 16.2 percent the highest, according to DOI data.

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Taken together, the proposals reflect an average increase of 13.4 percent affecting more than 720,000 renewing members, a sizable jump over the 8.36 percent growth regulators approved last year and the 4.8 percent growth in 2024.

Eileen McAnenny, president of the Employer Coalition on Health, said those hikes would be “very difficult for small businesses to absorb,” especially as employers navigate high costs for energy and unemployment insurance as well as the prospect of tariffs.

“Those rate increases are alarming when considered in the context that Massachusetts already has the second-highest health insurance premiums in the nation,” she said. “But unfortunately, I don’t think it’s surprising given that we set a cost growth benchmark each year that providers and drug companies blow through without consequence, and that we keep providing supplemental payments to providers and expecting nothing in return — no improved efficiency, no transparency.”

Retailers Association of Massachusetts President Jon Hurst said the “vast majority” of his group’s 4,000 members would be affected by increases in the merged market premium rates.

“The average small business in the retail, small restaurant world has sales today equal to pre-COVID. Their sales are flat, but their costs are through the roof, primarily health insurance,” Hurst said. “We’ve seen, over the last five years, an increasing number of dark storefronts. It’s still continuing long past COVID because of these cost increases, and health insurance premiums are by far the biggest nut.”

DOI will review each of the eight rate filings individually, and the department can reject proposals if it finds that the increases are “not reasonable in relation to health plan benefits, or if they are excessive or inadequate or use rating factors that are discriminatory or not actuarially sound,” the department wrote in an advisory.

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Last year, several carriers proposed rate increases larger than the versions that were ultimately approved.

DOI plans a virtual public hearing on June 17, where insurance carriers will present their proposals and others are invited to offer testimony, ahead of a final decision expected in August.

“We’re going to tell them it’s unaffordable, reject them. They can reject them,” Hurst said. “Maybe the insurers need to go back to the drawing board and reopen these contract negotiations with hospitals and pharma companies.”

The vast majority of the merged market rate increases would be driven by increasing medical and pharmacy claims, according to data insurers submitted to the state, with administrative costs, taxes and fees accounting for less than one-tenth of the total average hike.

Individual and small group health plans are required to spend 88 percent of premium dollars on health care services instead of administrative or other costs.

Insurers have long contended their hands are tied by high provider and prescription drug prices. Lora Pellegrini, president of the Massachusetts Association of Health Plans group that represents insurers, said carriers “are frustrated, too.”

“Premiums reflect those underlying health care costs. We have seen rate demands from providers in the high double digits. We have one provider who’s asked for a 70 percent increase in their rate. Plans can only do so much,” Pellegrini said. “The power of providers who have only gotten bigger and bigger with consolidation make it very hard for health plans to negotiate a robust deal, because consumers want these hospital systems in their networks.”

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Pellegrini pointed to financial headaches at MassHealth and the Group Insurance Commission, the latter of which needed a $240 million funding injection to continue paying claims for its 460,000 public employee members through the end of the fiscal year.

“Private-sector health plans have those same challenges,” she said.

Margins for private health insurers have been steadily declining. After peaking at 2.8 percent in 2020, the median private health insurer total margin dropped into the red in 2023 and fell again to -1.06 percent in 2024, according to data MAHP shared with the News Service.

Financial strain is rampant across the health care landscape. Total health care spending per capita in Massachusetts surged 8.6 percent from 2022 to 2023, more than twice the benchmark intended to represent a cost-containment goal. Watchdogs regularly warn about patients grappling with high premiums and medication costs.

The Division of Insurance has already flexed new authority to scrutinize health care costs. A market oversight law Healey signed in January tasked the office’s regulators with determining whether proposed rates are “excessive” by considering “affordability for consumers and purchasers of health insurance products.”

On March 12, the division issued regulatory guidance requiring insurance carriers to limit the growth of deductibles and copays to the rate of medical inflation, or roughly 4.8 percent.

“We are actively looking at other actions we can take to contain these health costs,” Healey said. “Everyone has a role to play – insurers, hospitals, the pharmaceutical industry – and everyone will need to step up to make Massachusetts a more affordable place to live and do business.”

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Healey and the Legislature last term agreed on a hospital oversight and market review law and a measure intended to rein in prescription drug costs. While implementation of those laws unfolds, policymakers are weighing additional action to address what one top senator dubbed a health system that is “falling apart.”

Asked how confident she is that Beacon Hill Democrats can navigate the thicket of competing interests to achieve additional reforms, McAnenny replied simply, “I hold out hope.”

Brown University Health’s hospitals in Rhode Island will no longer accept UHC’s Medicare Advantage plans starting July 1

The change comes after the insurer and the health system did not renew their contract, citing differences over reimbursement rates and administrative policies

Patients covered by UnitedHealthcare’s Medicare Advantage plans will no longer find their insurance accepted at Brown University Health’s hospitals in Rhode Island starting July 1.

The change comes after the insurer and Rhode Island’s largest health system failed to reach an agreement to renew their contract after months of negotiation.

“In addition to a modest reimbursement rate increase to cover the costs of caring for their members, we asked United to eliminate their administrative policies that deviate from traditional Medicare, such as unnecessary prior approval and utilization management, that cause frustration for patients and result in extra cost to our health care system,” a statement provided by Brown Health spokesperson Jessica Wharton said.

“Since both parties held firm in their positions, we mutually decided to end our Medicare Advantage hospital contract effective June 30, 2025,” the statement added.

UHC, however, disputes Brown Health’s version of events.

“We proposed extending our contract through the end of the year to provide Medicare Advantage members continued access to Brown University Health’s hospitals while we negotiate. Unfortunately, the health system refused and continues to seek price hikes that would make them significantly higher cost than any hospital in our Medicare Advantage network in Rhode Island,” said a statement provided by UHC spokesperson Cole Manbeck.

“We urge Brown University Health to share in our commitment toward reaching an agreement that is affordable so people enrolled in Medicare Advantage plans have continued network access to its hospitals,” the statement continued.

UHC also stated it is still negotiating with Brown Health, but Wharton said negotiations had finished.

What does this mean for UHC Medicare Advantage members?

Starting July 1, patients covered by UHC Medicare Advantage plans, including Dual Special Needs Plan (DSNP) and Group Retiree plans, coming to Brown Health’s hospitals in Rhode Island – which include Rhode Island Hospital, the Miriam Hospital, Newport Hospital and Hasbro Children’s Hospital – will be considered out of network, which will likely result in greater charges for receiving health care services.

UHC stated that under 20,000 members will be impacted by the change.

One exception is people enrolled in UHC’s Group Retiree PPO plan, which will still consider Brown Health as an out-of-network provider, but their cost will be the same as if they were in network.

The change does not apply to Brown Health’s hospitals in Massachusetts – Morton Hospital in Taunton and Saint Anne’s Hospital in Fall River – which are under a separate agreement and where those patients will still be considered to be in network.

Brown Health physicians will also continue accepting UHC’s Medicare Advantage plans.

Both UHC and Brown Health stressed that patients who use the hospitals in Rhode Island for emergency services should still be covered by the insurer.

Facing huge debts and low on cash, Commonwealth Care has eliminated more than 100 positions over the last year and is still desperately seeking a savior. But, should Palmieri receive the success fee, along with a separate multimillion dollar severance package, his total compensation could grow to more than $6 million, more than three times the $2 million he most recently reported receiving in 2022.

CEO Chris Palmieri approached Commonwealth Care board members with a demand, according to multiple people with knowledge of the negotiations who spoke on condition of anonymity to discuss sensitive conversations: He wanted a payment guarantee if the insurer was acquired, raising concerns he could walk away and jeopardize a potential deal. The board agreed to provide Palmieri a “success fee” of more than $2 million for an acquisition, according to those people with knowledge of the negotiations.

When Commonwealth Care Alliance was teetering on the verge of collapse in October and looking to be acquired, the chief executive officer of the nonprofit health insurer was also seeking assurances he would get a big payout.

Commonwealth Care Alliance declined to comment.

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The insurer is one of several health care organizations that have funneled additional pay to leaders and key employees at a time of financial distress. The chief executive of Lawrence General Hospital received a salary increase, though she has since resigned. And, Mass General Brigham continues to mete out incentive pay to workers at many levels while undertaking the largest-ever layoffs in the giant system’s history.

Compensation consultants say these practices are not unusual, even at organizations in financial distress. To recruit and retain valued employees, institutions often provide their executives and managers with pay packages that can seem divorced from financial problems on the ground.

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Christopher D. Palmieri, CEO of Commonwealth Care Alliance, photographed in 2016. Barry Chin/Globe Staff

“If they are able to accomplish the board’s goals, then they will get compensation that may, to the public, seem to be egregious or outrageous,” said Dr. Howard P. Forman, a Yale management professor and a practicing physician. “If you are looking to compete and recruit from the best possible candidates to do the job in the way you need it to be done, you need to be competitive in the marketplace.”

But, the often multimillion dollar pay packages of top executives are increasingly a hot topic, with the cost of health care spiraling ever upward while the industry struggles with a shortage of beds and mounting stress on doctors. Unions for health care workers have even proposed legislation in Massachusetts this year that would seek to cap CEO compensation at 50 times the organization’s lowest-paid salary.

To many front-line employees who feel increasingly squeezed, underappreciated, and undercompensated, the argument that high pay is needed to hold on to top executives falls flat.

“It’s infuriating,” said Dr. Lee Richman, a Brigham and Women’s Hospital resident who sits on the union bargaining committee for residents and interns. He said MGB has told the union, which is currently negotiating for higher pay, that their work shouldn’t be seen as a job, but as a calling.

“I would love it if our executives also saw it as a calling,” Richman said. “Having a lower CEO pay would attract people with the right priorities.”

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Paula Ward, an ICU nurse at MGB’s Newton-Wellesley Hospital, is also unconvinced such high executive salaries are necessary.

“It feels like an excuse,” said Ward, also a nurses’ union leader at the hospital. “We had the same problem at the front line, being able to retain people. … We are not a business. We are health care. We are not selling trinkets. These are people’s lives and their families. We need to invest at the bedside.”

Institutions large and small are all confronting pay issues.

Then-Lawrence General Hospital CEO Dr. Abha Agrawal stopped to chat with a nurse as she met with staff members at Holy Family Hospital in Methuen in November. Jessica Rinaldi/Globe Staff

Lawrence General, for example, was coming off a large loss when it acquired the Holy Family hospitals in Methuen and Haverhill in October from the bankrupt Steward Health Care system. Its CEO at the time, Dr. Abha Agrawal, sought a sizable increase in compensation, according to multiple people with knowledge of the talks, who asked not to be named given the sensitivity of the subject.

Though Agrawal had been on the job at that point for 10 months, Lawrence General’s finances had not much improved during her tenure, reporting a $15.9 million operating loss for the year ending in September. The Holy Family acquisition was underwritten with more than $100 million from the state.

The board hired a compensation consultant to review the request. Ultimately, Agrawal was provided an increase, sources said, though it’s not clear how much or what her salary was. (Agrawal’s predecessor, Deborah Wilson, earned $1.05 million in 2022, the most recent year the nonprofit hospital’s tax returns are publicly available.)

Agrawal ultimately left Lawrence General in February amid high turnover and allegations of a hostile work environment. Reached in mid-March, she declined to comment on the increase through an attorney, citing her “fiduciary duties to the Hospital.”

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A Lawrence General spokesperson said the board of trustees considered both its own needs and comparable organizations’ compensation when setting CEO pay.

“Massachusetts is renowned for providing top-tier healthcare to its communities, with CEOs of … hospitals committed to delivering high-quality, safe care despite the ongoing market challenges that continuously impact operations,” the spokesperson said.

Mass General Brigham also defended the compensation of its top executives amid wide-scale layoffs that the system announced in February. The Globe has reported the reductions could number as many as 1,500 positions. MGB executives have said they are in part to help offset $250 million in projected operating losses over the next two years.

Dr. Anne Klibanski, CEO of Mass General Brigham, photographed in 2019. Jim Davis/Globe Staff

Nonetheless, MGB still provided incentive pay to employees at multiple levels as part of their compensation packages, if they achieved their performance goals, executives said. It is unclear how much these payouts totaled, or who and how many received them.

In the past, such pay has tallied in the millions of dollars for some. Of the $6 million in total compensation Chief Executive Anne Klibanski received in 2022, more than half — $3.37 million — was categorized in tax filings as “bonus and incentive compensation.”

“Mass General Brigham Board of Directors works with a third party to benchmark compensation for senior executive positions to ensure unbiased oversight that includes a review of similar not-for-profit health systems and academic health systems,” a spokesperson said in a statement.

The MGB spokesperson provided a list of pay for CEOs of other health care organizations with more than $10 billion in revenue, which she said was comparable to MGB. By those metrics, Mass General Brigham’s CEO compensation for 2022 was in line with others. The CEO of New York-based Northwell Health earned $5.3 million in 2022, while Mayo Clinic’s CEO earned $3.7 million that same year. At Banner Health, the CEO earned $14.6 million.

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Compensation experts acknowledge such numbers can seem large, but they view compensation in a broader context of high turnover among executives and relatively little job security.

And raises aren’t necessarily tied to an organization’s bottom line, said Susan Malanowski, a compensation consultant with the Wilson Group. Paying a retention bonus could well be worth it if it helps ensure the organization survives. If a CEO’s job responsibilities increase dramatically, organizations will often increase pay as soon as the executive takes on more work, though some may wait.

Forman, the Yale professor, said hospitals must pay leaders market rates, but there are limits to what’s reasonable.

“There are lots of examples in the for-profit and nonprofit world where it’s ‘Heads I win, and tails you lose’ — where a CEO is paid handsomely during the good years, and when bad things happen, they suffer not,” Forman said. “I do think there needs to be some better form of long-term accountability.”

Hundreds of Mass General Brigham residents and fellows demonstrated outside the system’s flagship hospitals in December arguing for higher pay. David L. Ryan/Globe Staff

Jessica Bartlett can be reached at jessica.bartlett@globe.com. Follow her @ByJessBartlett.