Health insurance premiums set to rise in Minnesota

Health insurance premiums for thousands of Minnesotans are expected to increase in 2026. The proposed rate hikes are driven by rising health care costs, and federal subsidies designed to make coverage more affordable are set to expire at the end of 2025.

Preliminary filings released by the Minnesota Department of Commerce indicate that insurers are seeking average premium increases ranging from 7 percent to 26 percent for 2026 plans on the individual market, and between 7 percent and 17 percent on the small group market.

Approximately 202,000 Minnesotans are covered through the small group health insurance market, which includes businesses with two to 50 full-time employees. The individual health insurance market covers around 187,000 state residents who are not eligible for coverage through their employer or public programs like Medicare or Medicaid.

The proposed increases would affect individuals who buy either individual or small group health insurance directly from insurers or through MNsure, Minnesota’s health insurance marketplace.

“These are some pretty substantial changes,” said Grace Arnold, commerce commissioner for Minnesota. “Farmers, small business owners and early retirees are going to bear the brunt of a lot of the changes that were made at the federal level.”

Medica, one of the state’s carriers, has proposed the highest individual market increase at 26 percent, while others, including Blue Plus, UCare and HealthPartners, are requesting adjustments between 12 percent and 17 percent.

The potential rate increases follow growing uncertainty about the future of federal premium subsidies under the Affordable Care Act. President Donald Trump’s extensive tax and spending package did not include funding for enhanced premium tax credits. However, Congress still has the opportunity to reinstate these subsidies this fall.

“It was a conscious choice to prioritize tax cuts for the very wealthy over helping middle-income Minnesotans,” Arnold said.

These subsidies were enacted by Congress in 2021 during the COVID-19 pandemic to help people maintain their health insurance coverage. They made existing tax credits through MNsure more generous and removed the income cap.

Libby Caulum, the CEO of MNsure, said that the subsidies operate like an instant discount applied to health insurance premiums, helping thousands of Minnesotans access affordable insurance through MNsure.

“We still have some tax credits available for Minnesotans, but the income thresholds will change,” Callum said. “If Congress does not act quickly, costs are going to go up for nearly 90,000 of our MNsure enrollees, and 19,000 of those folks will lose access to all of the financial help that they have been able to access over the last four years.”

People across the state can expect to pay around $180 more per month, Callum added, but families living in greater Minnesota and enrollees over age 55, who are too young for Medicare, will be hit the hardest.

Caulum shared an example of a couple in their early 60s living in Mankato with a dual household income of $89,000. They will no longer be eligible for the tax credits, causing their monthly premium to surge from $474 to about $2,000 in 2026. This means the couple would pay nearly four times their current payment to remain on the same plan.

Minnesota’s bipartisan reinsurance program, established in 2017, was created to address rising health care costs and market volatility. The program helps keep premiums lower for individuals in the market, stabilizing premium prices in recent years. Arnold and Callum said that premiums would have been 25 percent higher, and consumers would have faced higher monthly costs without recent legislative action to extend this program.

The state is currently reviewing proposed premium rate increases. Final rates will be available in October for coverage starting on Jan. 1, 2026, with open enrollment for health insurance plans beginning on Nov. 1.

“I know Minnesotans are concerned about rising costs and how these new federal policy changes might impact them,” Callum said. “We want to make sure that people know what options are available regardless of what's happening on the federal stage.”