OIC Podcast: Why Health Insurance Rates Keep Rising and Why the State Can’t Just Say No

When health insurance rates jump more than 20%, it’s fair to ask: Who’s checking these numbers, and why are increases this large getting approved?

In “What’s the deal with health insurance rates?”, OIC Answers on Insurance host Aaron VanTuyl puts those questions to Washington Insurance Commissioner Patty Kuderer, Deputy Commissioner Todd Lovshin and Chief Actuary for Health Insurance Rocky Patterson. Their conversation explains what the state reviews, what’s pushing costs higher and why controlling premiums takes more than rejecting a rate request.

First, these aren’t employer renewal rates

The discussion starts with Washington’s approved 22.2% average increase for 2027 Exchange health insurance plans. These are individual-market plans that people buy for themselves. They aren’t employer group rates or BHT renewal rates.

Our breakdown of the approved 2027 Exchange rates shows the changes by insurer. Employers shouldn’t use that average to predict their own renewal, but rising medical and prescription prices put pressure on both markets.

The state reviews rates. It doesn’t simply choose a lower price.

“We don’t set the rates. We review the rate requests,” Kuderer explains. The OIC examines whether an insurer’s request complies with the law and is supported by its expected costs. When those requirements are met, she says, the office must approve it.

That review takes months. Lovshin describes insurers submitting their proposed rates, coverage documents and provider networks. Patterson’s team examines recent spending, checks the data and questions assumptions about what coverage will cost during the coming year.

Rejecting an increase doesn’t erase those costs. The team explains that if premiums consistently fall short of what’s needed to pay claims, an insurer could eventually be unable to deliver the coverage people have paid for.

The review can also push a rate above the original request. Patterson says questions and new information sometimes reveal that expected costs are higher than the insurer first estimated. That’s useful context for our earlier article, Another 22% Rate Request Adds to Washington’s Health Insurance Cost Pressure: a request starts the review; it isn’t the final decision.

Four forces are pushing costs higher

Patterson separates the increases into four parts:

• Higher prices: The same visit, treatment or prescription costs more.
• More care: People use more visits, treatments and other services.
• More expensive services: Spending shifts toward higher-cost care, such as specialist visits instead of primary care.
• A changing group of people: Those who remain insured are expected to need more care, on average.

These describe spending patterns, not whether a particular person needed a treatment. Patterson is careful not to draw that conclusion from the numbers alone.

He also identifies where much of the money goes. In the 2027 spending breakdown he discusses, hospitals account for about 39%, other providers outside hospital systems account for 24%, and prescription drugs account for 19%. Those are shares of expected spending, not percentage increases.

Lovshin and Patterson connect some hospital cost pressure to consolidation. Larger systems can gain negotiating power, especially where insurers have few alternatives for building a provider network.

When healthier people leave, costs can rise for those who stay

As coverage gets harder to afford, people who don’t expect to need much care may be more likely to drop it. People who know they’ll need treatment have a stronger reason to keep paying. Patterson explains that this can leave the insured group with higher average health care needs and higher expected costs.

Going without coverage can also mean delaying care. A condition that might have been caught earlier may be more difficult and expensive to treat by the time someone gets help.

Why the conversation comes back to primary care

Patterson identifies limited access to primary care as another source of cost pressure. Kuderer points to the opportunity to catch problems earlier and help people manage ongoing conditions before they need more expensive treatment.

Their discussion separates two jobs: reviewing whether insurance rates reflect expected costs, and addressing the costs themselves. A rate review doesn’t make a hospital visit or prescription less expensive.

For readers looking into a particular insurer’s increase, the team recommends starting with its rate decision memo rather than the full technical filing. The first few pages explain the main cost drivers. Links to those memos are available in the episode’s show notes.

How BHT and Nice help with everyday care costs

That focus on primary care connects with work Business Health Trust is already doing through Nice Healthcare, included at no additional cost with most BHT medical plans.

Nice uses a direct primary care approach: it provides covered everyday care outside the insurance billing process. It works alongside medical insurance, not as a replacement for it.

For employees, that can mean care without another out-of-pocket bill. Eligible employees and dependents can access $0 primary care visits and medications on Nice’s covered list when prescribed through Nice and filled at a participating pharmacy. Virtual visits and in-home services in supported areas can also make care easier to fit into the day.

For employers, it can mean fewer insurance claims. When Nice replaces a visit or prescription that would’ve been billed through insurance, the employee can avoid their share of the bill while the health plan avoids the associated claim cost. The opportunity isn’t just to shift more costs onto employees. It’s to deliver covered care through a different payment model.

Across 10 employer groups using Nice, BHT’s estimates show over $120,000 in avoided insurance claims costs and approximately $40,000 in employee savings on visit and prescription copays. Our article, Health Benefits Keep Getting More Expensive. What Can Washington Employers Do?, takes a closer look at those results.

These figures aren’t annualized, and avoided claims don’t translate dollar for dollar into lower premiums. They can help reduce cost pressure, but they don’t guarantee a particular renewal rate.

Ask your broker or BHT whether your plan includes Nice, then help employees find and use it. Giving people an affordable first stop for everyday care can support their health, reduce their out-of-pocket spending and keep some costs from becoming insurance claims in the first place.