The latest round of health insurance premium hikes announced by New York regulators adds to evidence that state policies are drowning consumers instead of helping them.

Late last month, the Department of Financial Services signed off on premium increases for 2025 coverage that averaged 13 percent, or four times the inflation rate, for non-group or individual policies. 

For small group insurance policies, the department approved hikes averaging 8 percent or more than double the inflation rate.

Both figures were the highest one-year increases since 2018.

Because the state-approved hikes were smaller than what insurers had requested, the department claimed that it had saved consumers hundreds of millions of dollars. A look at the national picture suggests the opposite is true.

According to federal survey data for 2023, New York’s average premium for employer-sponsored single coverage was the third-highest in the U.S. at $9,173. Its average cost for family coverage was second-highest at $26,355.

Those amounts were 12 percent and 10 percent higher than the national averages, respectively.

Deeper analysis of the data provides further evidence that the state’s price regulation regime, known as prior approval, is failing as a tool for protecting consumers.

Most large employers are self-insured, which exempts their premiums from state regulation. Yet New York’s large-group premiums are more affordable in comparison to national averages than its state-regulated small-group premiums.

As seen in the chart below, which is based on three-year averages, New York’s small-group premiums have been 23 percent higher than the U.S. average, while its large-group premiums have been 13 percent higher.

That disparity might have been expected to shrink under the prior approval law, which was enacted in 2010. Instead, it generally has gotten wider.

Meanwhile, Albany further drives up health coverage costs through heavy-handed taxation and regulation.

Two insurance taxes levied under the so-called Health Care Reform Act add $6 billion to premiums statewide – which amounts to hundreds of dollars a year for a typical family.

Lawmakers also contribute to high premiums by continually imposing coverage mandates without properly weighing the costs against the benefits. 

The latest example – still in the proposal stage – would bar insurers from collecting any copayments or coinsurance for asthma inhalers. This would save money for asthma patients by increasing costs for everyone else – and raise the question of why one chronic disease should be treated differently than others.

As it has before, the Department of Financial Services issued a self-congratulatory press release which failed to mention that consumers’ costs were going up – between two and four times as fast as inflation.

Instead of making hollow boasts, state officials should focus on truly improving the affordability of health coverage – which starts with rolling back the taxes and regulations that make things worse.