2026 Rate Changes

2026 Rate Changes - New Jersey: +14.9%; ~590,000 enrollees facing MASSIVE rate hikes starting in January

Fri, 08/08/2025 - 9:59am

Overall preliminary rate changes via the SERFF database, New Jersey Insurance Dept. and/or the federal Rate Review database.

Aetna Life Insurance Co:

(Aetna/CVS is pulling out of the entire individual market nationally; I've estimated their current enrollment, see below for methodology)

AmeriHealth HMO:

AmeriHealth HMO, Inc. ("AHNJ”) is revising premium rates for the New Jersey Individual Health ACA compliant products, effective from January 1, 2026. Rate increases average 16.8%, ranging from 16.8% to 16.8%. The proposed revisions to each plan are shown on the last page of this exhibit. About 35 members will be affected.

AmeriHealth Insurance Co of NJ

AmeriHealth Insurance Company of New Jersey ("AHIC”) is revising premium rates for the New Jersey Individual Health ACA compliant products, effective from January 1, 2026. Rate increases average 13.5%, ranging from 11.1% to 15.2%. The proposed revisions to each plan are shown on the last page of this exhibit. About 130,000 members will be affected.

Horzon Healthcare (BCBS)

Horizon Blue Cross Blue Shield of New Jersey (Horizon-BCBSNJ) is increasing premium rates for the NJ Individual ACA-compliant products by an average of 17.0% for 2026 enrollments. Rate increases by product are displayed in the table below. Additionally, the final premium will depend on the member’s age and family composition.

Approximately 245K members are estimated to be impacted by rate actions exceeding 10%. Historical average yearly premium increases for Individual ACA-compliant products by Horizon-BCBSNJ:

2023: 9.4%

2024: 4.2%

2025: 6.1%

Horizon-BCBSNJ is subject to the State and Federal Minimum Loss Ratio requirements. This means that at least 80% of premium dollars – after risk adjustment and ACA-imposed fees and taxes - has to be spent on medical costs. The rate actions for 2026 are projected to meet this requirement. Reasons contributing to the increase in premium rates include the following:

Medical and prescription drug costs inflation. Service costs increase each year. The contributing factors include: health care providers increasing their fees, members utilizing more services and supplies, advances in prescription drug development and medical technology (such as gene therapies), and heavy marketing of Specialty drugs, among other factors.

Morbidity. American Rescue Plan Act (ARPA) introduced additional premium subsidies. They are scheduled to expire at the end of 2025. With their expiration, we expect the ACA market to shrink as healthier members leave ACA coverage. This would result in the ACA risk pool retaining less healthy members, leading to higher morbidity leading to higher rates.

Oscar Garden State Insurance

(Unfortunately, Oscar's current enrollment is redacted; see below)‭

Exhibit‬‭ A‬‭ summarizes‬‭ the‬‭ proposed‬‭ rate‬‭ changes‬‭ by‬‭ plan‬‭ effective‬‭ January‬‭ 1,‬‭ 2026.‬‭ Rate‬‭ changes‬‭ vary‬‭ by‬‭ plan‬‭ due‬‭ to‬‭ a‬ ‭combination‬‭ of‬‭ factors‬‭ including‬‭ shifts‬‭ in‬‭ benefit‬‭ relativities‬‭ in‬‭ both‬‭ benefit‬‭ leveraging‬‭ and‬‭ cost-sharing‬‭ indexing‬‭ and‬ ‭modifications‬‭ to‬‭ the‬‭ plan‬‭ behavior‬‭ change‬‭ factors.‬‭ Using‬‭ in-force‬‭ business‬‭ as‬‭ of‬‭ March‬‭ 2025,‬‭ the‬‭ proposed‬‭ average‬‭ rate‬‭ change for renewing plans is‬ (REDACTED). This rate increase‬‭ is absent of rate changes due to attained age.‬‭

UnitedHealthcare

The overall average rate change is 18.4%. The rate change by plan varies from 16.5% to 22.8%.

There are 15,679 individuals impacted as of March 31st, 2025.

The premium collected between January 1st, 2024 and December 31st, 2024 was $95,739,850. Incurred claims net of reinsurance during this period were $58,073,719 and UHIC is estimated to pay $17,270,906 into the risk adjustment program. The loss ratio, or portion of premium required to pay medical claims, for this time period is 78.7%.

Key Drivers of Change in Medical Service Costs

Increasing Cost of Medical Services: Annual increases in reimbursement rates to health care providers – such as hospitals, doctors, and pharmaceutical companies.

Increased Utilization: The number of office visits and other services continues to grow. In addition, total health care spending will vary by the intensity of care and use of different types of health services. The price of care can be affected by the use of expensive procedures such as surgery versus simply monitoring or providing medications.

Higher Costs from Deductible Leveraging: While health care costs continue to rise every year, if deductibles and copayments remain the same, a greater percentage of health care costs need to be covered by health insurance premiums each year.

Impact of New Technology: Improvements to medical technology and clinical practice require use of more expensive services - leading to increased health care spending and utilization.

Demographics: Change in the projected age, gender, and metal mix of the underlying population can change the medical claims expected to be incurred.

Morbidity: Change in the projected health status of both the New Jersey individual market and UHIC’s population lead to increased healthcare spending and a decrease in the offsetting impact of the risk adjustment program.

Regulatory Changes: The expiration of enhanced premium subsidies passed under the American Rescue Plan Act (ARP) as well as the CMS 2025 Marketplace Integrity and Affordability Proposed Rule are expected to lead to higher costs as healthier enrollees exit the market.

Ambetter/WellCare

WellCare Health Insurance Company of New Jersey, Inc. is filing rates for the individual block of business, effective January 1, 2026. This document is submitted in conjunction with the Part I Unified Rate Review Template and the Part III Actuarial Memorandum.

This information is intended for use by the New Jersey Department of Banking and Insurance, the Center for Consumer Information and Insurance Oversight (CCIIO), and health insurance consumers in New Jersey to assist in the review of WellCare Health Insurance Company of New Jersey, Inc.’s individual rate filing.

The results are actuarial projections. Actual experience will differ for a number of reasons, including population changes, claims experience, and random deviations from assumptions.

WellCare Health Insurance Company of New Jersey, Inc. is submitting this rate filing for its individual health insurance plans, effective January 1, 2026. The proposed average rate increase is 17.2%, which would apply to approximately 5,077 members.

This rate change reflects expected increases in the cost of providing coverage in the individual market. The primary factors contributing to the proposed rate increase include:

Statewide Average Morbidity (SWAM) projection. SWAM has emerged as the primary driver of the change. 2025 Wakely data shows 2025 statewide morbidity trending well above initial projections and exceeding 2026 expectations. Our 2026 projected statewide morbidity trend was updated for market dynamics and a deteriorating risk pool.

Statewide Average Premium (SWAP) projection. The filing reflects updates to SWAP assumptions to align premiums with the elevated statewide morbidity and corresponding increase in anticipated market-wide claims costs. Specifically, the projected 2026 SWAP has increased reflecting the deteriorating risk pool and associated cost pressures.

Contributing to the projected SWAM is the expected expiration of the Enhanced Advance Premium Tax Credits. The federal eAPTCs, which have existed since 2021, are currently scheduled to expire at the end of 2025. With the expected expiration, net premiums are projected to rise significantly for many enrollees. This is anticipated to result in adverse selection, as healthier and more price-sensitive individuals are more likely to forgo coverage, leading to a higher average morbidity within the individual market risk pool. The resulting shift in risk is expected to contribute materially to higher claims costs and overall premium requirements for 2026.

In addition to these drivers, annually rising medical costs continue to affect premiums. Some of these drivers include increases in the price of services, the number of services used, and the shift toward more complex and intensive treatments.

This filing reflects the cost of providing comprehensive health coverage in the individual market under current federal and state policy expectations.

As noted above, I don't have the current enrollment for either Aetna (which is dropping out of the market and thus has no 2026 filing) or Oscar (which has redacted their enrollment data). This means I have to make educated guesses regarding the enrollment in each.

Using the 2024 CMS liability risk score data, I estimate there's roughly ~590,000 people enrolled in New Jersey's individual market this year (~513,000 on exchange, ~76,000 off-exchange).

Since 395,791 of these are accounted for, that leaves roughly ~194,000 presumably currently enrolled in either Aetna or Oscar plans.

Normally I'd just assume an even split, but as Andrew Sprung reminded me, New Jersey is one of the few states which regularly reports their total individul market enrollment (both on & off-exchange). The most recent report only runs through December 2024, but I can use it as a guide.

In 2024, Aetna held around 4x as many individual market enrollees as Oscar did. It's certainly possible that those ratios have shifted this year, but in the absence of any other hard data I'm going to assume roughly ~80% of the "missing" enrollees are with Aetna and ~20% are enrolled via Oscar.

If so, that means a semi-weighted average rate hike in the New Jersey indy market of around ~14.9%.

It's important to remember that this is for unsubsidized enrollees only; for subsidized enrollees, ACTUAL net rate hikes will likely be MUCH HIGHER for most enrollees due to the expiration of the improved ACA subsidies & the Trump CMS "Affordability & Integrity" rule changes.