Increase in Health Insurance Premiums Expected for Minnesotans
Health insurance premiums for many Minnesota residents are projected to rise in 2026. This increase, influenced by escalating healthcare costs, comes as federal grants aimed at making coverage more affordable will come to an end at the close of 2025.
The Minnesota Department of Commerce has released a preliminary report indicating that insurers are proposing average premium increases ranging from 7% to 26% for individual markets, and 7% to 17% for small group markets in 2026.
About 202,000 people in Minnesota are enrolled in the small group health insurance market, which includes businesses with 2 to 50 full-time employees. Another 187,000 state residents rely on individual health insurance markets and do not have coverage through employers or public programs like Medicare or Medicaid.
The proposed changes will impact those who buy individual or small group health insurance directly from insurers or through Mnsure, Minnesota’s health insurance marketplace. “These are significant changes,” noted Grace Arnold, the state’s Secretary of Commerce. “Farmers, small business owners, and early retirees will likely feel the most impact from these federal adjustments.”
Among the insurers, Medica is suggesting the steepest increase for individual markets at 26%, while other insurers like Blue Plus, UCARE, and HealthPartners are looking at hikes between 12% and 17%.
This uncertainty follows ongoing discussions about the future of federal premium subsidies under the Affordable Care Act. Recent legislation did not include funding for an enhanced premium tax credit, but Congress might have an opportunity to address these grants in the near future.
“It seems there was a choice to prioritize tax cuts for affluent individuals over support for middle-income Minnesotans,” Arnold commented. These federal grants, introduced during the COVID-19 pandemic, were designed to help individuals maintain their health insurance by enhancing existing tax credits without income limits.
Libby Caulum, CEO of Mnsure, emphasized that these grants function essentially as immediate discounts on health insurance premiums, assisting many Minnesotans in obtaining affordable coverage. “While some tax credits remain, the income thresholds will change,” she explained. If Congress doesn’t act quickly, around 90,000 Mnsure subscribers may see their costs rise, and 19,000 could lose all financial aid they have received over the past four years.
Coulm pointed out that, on average, individuals can expect to pay about $180 monthly for coverage. However, younger residents who are not yet eligible for Medicare might be hit particularly hard. She shared an example of a couple in their early 60s. With a joint income of $89,000, they would lose tax credit eligibility and face a premium increase from $474 to about $2,000. This suggests that their payments could increase nearly fourfold while remaining on the same plan.
Since its inception in 2017, Minnesota’s bipartisan reinsurance program has aimed to tackle rising healthcare costs and stabilize the market. Arnold and Coulm noted that without recent legislative efforts to expand this program, premiums could have been 25% higher, creating additional burdens for consumers.
As the state evaluates the proposed rate increases, final figures will be accessible in October, ahead of coverage set to start on January 1, 2026. Open enrollment for health insurance plans will begin on November 1.
“People are understandably anxious about rising costs and the potential impacts of these new federal measures,” said Coulm. “We want to ensure that residents are aware of their options, no matter how things unfold at the federal level.”
