The Group Insurance Board set health premium rates for 2026. Actual monthly premium costs by plan will be included in the open enrollment materials, which will be posted closer to the annual open enrollment period (October 6-31, 2025).
Reasons for Premium Increase
The increases next year are primarily driven by three factors:
Rising Healthcare Costs
Healthcare costs, including medical, pharmacy, and dental, have increased across the insurance industry. These increases are projected to continue along with inflation, affecting all elements of healthcare, including provider wages, medical supplies, etc.
Stabilizing the Reserve Fund
The Board has a reserve fund for the Group Health Insurance Program. The reserves are used to pay prescription and dental claims and operations, as well as protect the program against possible adverse experience and negative market trends. The reserve funds are affected by investment returns.
Up until 2023, the Board used reserve funds to reduce premium rates. In 2024, reserve funds dropped too low to continue reducing premiums, so the Board began implementing a strategy to refund the reserves. This will continue for the next few years, pending changes in program costs and/or investment returns.
Administrative Costs
Administrative fees pay for operational costs to run the program, including compliance audits, actuarial services, ETF staff salaries, maintaining the data warehouse, and systems. ETF is in the process of implementing an Insurance Administration System (IAS), and the cost of IAS has contributed to the overall increase in administrative fees.
Premium Increase by Plan Category
Below summarizes the average premium rate increases by plan category.
Active Employees
- State employees: 8% (weighted average). The Department of Administration, Division of Personnel Management sets the premium contribution for state employees and the employer contribution to the Health Savings Account.
- Local employees: 11.5% (weighted average). The premium contribution for local employees is determined by each individual employer, and employee experience may vary by plan. This increase is higher than for state employees because local employers may choose to stay in or leave the program each year. This change in membership creates potentially more risk for health plans, which affects the stability of premium rates over time.
Retirees
Medicare Advantage premiums are affected by changes in federal subsidies based on Medicare's annual star rating. Medicare evaluates each plan’s customer satisfaction and quality of care, with highest-rated plans getting the largest subsidies.
The Medicare Advantage plan has been in the highest star category since it has been offered by UnitedHealthcare. Unfortunately, Medicare reduced subsidy payments across the board for 2026. Despite this, Medicare Advantage remains the lowest-cost Medicare plan option for members.
Premium changes for health insurance (without Uniform Dental) are plan-specific. Retirees should check their Decision Guides when available to better understand the increases applicable to them.