I was absentmindedly opening my mail over the weekend when a number on an innocuous-looking letter from my health insurance carrier stood out to me: 20 percent. That’s how much my health insurance rate could increase next year.
It was buried halfway down the page, with a note saying that “these adjustments reflect broader trends in healthcare spending, including rising medical service costs and general inflation.”
I was stunned by that number, and I’ve learned that I won’t be alone. Maine could have among the highest health insurance rate increases in the Northeast next year, according to Bob Carey, superintendent of the Maine Bureau of Insurance.
“They are eye-popping numbers,” Carey said.
Mainers who receive health coverage through the individual and small group employer market could see rate increases up to 32 percent next year, based on proposed rates submitted by insurers and currently under review by the state Bureau of Insurance. If approved, the average rate increase for individuals would be 26 percent and for the small group market it would be 19 percent.
Carey said he has worked in insurance for 25 years and doesn’t remember another time when health insurance carriers requested 30 percent increases.
“It’s a lose-your-sleep moment because I can only push so far,” he said. “When the claims come in, they need premium to pay the claims.”
The state publicly reports how much in premiums health insurers take in and pay out in claims, as well as underwriting gains or losses, which, according to a Bureau of Insurance explanation, are the amount of premium remaining after claims and administrative expenses are paid. Underwriting gains aren’t necessarily profit, the bureau notes, since they don’t reflect income from investments, capital gains and losses and federal income taxes.
In 2023, health insurance companies in Maine reported an underwriting loss of $1.27 million in the individual market. The large group market reported gains of $54.4 million and the small group market reported gains of $19 million.
It’s important to note that these proposed rate increases have not yet been approved and are still under review. However, the final rate likely won’t be dramatically different.
The Bureau of Insurance is in charge of reviewing and approving rate increases for the merged market, which covers roughly 116,000 Mainers. Insurers in mid-June submitted proposed increases based on what they are paying out in claims and expect in market trends.
Carey’s office then reviewed the requested rates for whether they are excessive, unfairly discriminatory or inadequate. The insurers then resubmit with updated information in mid-July and the final rate is then typically finalized around mid-August.
(The “merged market” includes all individuals and all small employers in a single risk pool. Maine merged the two groups several years ago in an effort to keep costs down, according to Maine Public. Individuals on the market may use the exchange — CoverME.gov — to purchase coverage.)
This year, however, due to the “magnitude of the increase,” Carey has opted to hold a public forum on Aug. 15 for Mainers to hear from insurance carriers about their proposed increases and voice their thoughts. Information about how to register can be found here.
After reviewing the public comments, Carey expects to finalize 2026 rates in late August.
While the rate increases apply to a relatively small group, Carey said Mainers across the board can expect similar increases since they are subject to the same market forces.
“There are a lot of bad things happening in the market all at once.”
There are two major factors driving up insurance rates in Maine, Carey said. The first is the rising costs of prescription drugs, which he said could also be impacted by new tariffs on imported drugs.
Point32Health, which owns Harvard Pilgrim Health Care, laid off 2 percent of its workforce earlier this year due to financial pressures, including spending $70 million on weight loss drugs called GLP-1s. It reported an operating loss of $382 million last year.
The second factor is that Maine only has two major health systems, and when there’s little competition in the market, that can drive up the cost of care. On top of that, disputes between health systems and insurers, such as the ongoing contract fight between Northern Light and Anthem, can impact rates. And Maine relies heavily on in-patient services, which are more expensive than out-patient services.
There’s also a lot of other “noise” coming out of the federal government that impacts rates, Carey said. Congress passed legislation that imposes new restrictions on some Medicaid recipients and is expected to result in 34,000 Mainers losing coverage from MaineCare, the state’s version of Medicaid, when the regulations go into effect in between 2026 and 2028.
With more enrollment restrictions or rate increases, healthier people are the most likely to leave the marketplace, Carey said. That means the remaining people in the insurance pool are sicker, which then increases the premiums for everyone.
In addition, the enhanced premium health tax credits are set to expire at the end of this year unless Congress votes to extend them. These tax credits were first implemented in 2021 through the American Rescue Plan Act and are saving Mainers an estimated $90 million this year, according to the state. About 50,000 Mainers qualify and on average the tax credits lower monthly premiums for households by nearly $180.
“People are going to be shocked when they see how much more the prices of health coverage is without those enhanced premium tax credits, and not just poor people,” Carey said.
Open enrollment begins in November and Carey said it will be important for Mainers to shop around and find the best plan for their situation. Maine’s health insurance marketplace, CoverMe.gov, allows enrollees to explore their plan options and has people who can assist over the phone.
