Minnesota Health Insurance Premiums to Rise Sharply in 2026 Amid Expiring Federal Subsidies

Health insurance premiums in Minnesota are projected to rise significantly in 2026 due to increasing health care costs and the impending expiration of enhanced federal subsidies. Preliminary filings from the Minnesota Department of Commerce reveal that insurers are seeking average increases ranging from 7% to 26% on the individual market and 7% to 17% in the small group market. Approximately 202,000 Minnesotans receive coverage through the small group market, while 187,000 are covered in the individual market, including those purchasing insurance via MNsure, the state's health insurance exchange.

The highest proposed individual market premium hike comes from Medica at 26%, with other carriers like Blue Plus, UCare, and HealthPartners requesting increases between 12% and 17%. These hikes primarily affect individuals who buy insurance directly or through MNsure and are impacted by the federal subsidies enacted during the COVID-19 pandemic to boost affordability. These subsidies are set to expire unless Congress acts to reinstate them.

The expiration of these enhanced subsidies is expected to increase costs for nearly 90,000 MNsure enrollees, with 19,000 losing access to all subsidies. This change will disproportionately impact older adults under 65 and residents of greater Minnesota. For example, a couple in their early 60s from Mankato could see premiums increase from $474 to $2,000 monthly if subsidies are not reinstated.

Minnesota's bipartisan reinsurance program, initiated in 2017, has helped stabilize premiums by addressing market volatility and health care cost pressures. Officials estimate that premiums would have been up to 25% higher without this program. The program’s current extension is crucial in mitigating some of the premium increases.

Regulatory review of the proposed rate hikes is underway, with final rates expected by October 2025 for coverage starting January 1, 2026. MNsure's open enrollment will begin November 1. State officials emphasize the importance of awareness about available insurance options amid these federal policy shifts and market dynamics, especially for small business owners, early retirees, and farmers who may feel the greatest financial impact.