Why health insurance plans for individuals and small companies will cost hundreds more per year?

Next year, health insurance prices for individuals and small businesses will jump again - and twice as much, which could increase monthly premiums by nearly $700 a year.

After soliciting public input, officials with the state Division of Financial Regulation said Thursday they approved an average 8% rate increase for individual plans sold on the federal marketplace - just 1% less than companies requested earlier this year. The department also approved an average 12% rate increase for small companies, largely in line with the companies' requests, according to data released Thursday.

PacificSource Health Plans will receive the largest increase in the individual market at just over 11%, while regulators have approved more than 16% rate increases for small business plans sold by Providence Health Plan.

Andrew Stolfi, Oregon's insurance commissioner, said state officials are pleased with how the rate-setting process went.

"The health insurance marketplace is competitive, and in 2025, five carriers will offer plans in every Oregon county, giving Oregonians more options to choose a plan that fits their budget," Stolfi said in a statement.

The latest quarterly data shows that nearly 170,000 people in Oregon have purchased health insurance, mostly on the federal marketplace. This online portal allows individuals to get subsidies for premiums and other costs, usually in the form of a tax deduction. About 150,000 people are insured through group plans.

The department's analysts spent several months reviewing rate increase requests and reduced those that did not meet the allowable parameters. The department then solicited public feedback on the rates. Oregonians may have resigned themselves to permanent rate increases. Only one person left a comment, posting the same statement five times. "These rate increases are just awful," the anonymous commenter said. "I already have many people opting out of the marketplace because it is still too expensive for their income level. There will be more and more people going without insurance because of this."

Take a deeper dive

More information on the rate setting process can be found in the Consumer Guide to Filing 2025 Health Insurance Rates and the Consumer Guide to Reviewing Health Insurance Rates.

The numbers were the first since Oregon phased out eligibility verification for Medicaid participants. During the pandemic, under a federal agreement, the state did not remove from free insurance those whose income increased. But that agreement expired in 2023, and states began in May to review their rolls and remove those who no longer met the low-income requirements. About 230,000 Oregonians have lost their free health insurance, even though the state had the highest rate of retention in the nation as of last month. State officials have switched about 23,000 people who no longer qualify for Medicaid benefits to a new program that essentially extends free insurance to people who earn slightly more than they should under traditional Medicaid.

It is unclear how many people excluded from Medicaid obtained insurance through an employer or how many enrolled in the federal marketplace. The federal government has not shared that data. But the latest quarterly data on individual enrollment suggests that thousands of Oregonians who lost Medicaid may no longer have health insurance.

People can sign up for health insurance any time a "qualifying life event" occurs, such as getting married, having a baby, or losing health insurance. For the rest of us, open enrollment begins Nov. 1 through Jan. 15 this year.