Burcum: If Congress doesn’t act, many middle class families will face health insurance hikes

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Minnesota has done its part to keep health insurance affordable for entrepreneurs, early retirees, farm families and others. Unfortunately, the same can’t be said of congressional Republican majorities.

While federal lawmakers still have time to make a critical fix to offset steep price hikes for 2026 coverage, the window of opportunity to add a commonsense solution to the “Big Beautiful Bill” before final passage is closing swiftly. Concerned consumers should quickly contact their congressional representatives and tell them to extend the Affordable Care Act’s expanded financial assistance for the middle class before it’s too late.

This aid, which comes in the form of advance federal tax credits, acts to instantly discount monthly premium bills. During the COVID-19 pandemic, the income eligibility cap (400% of the federal poverty level) was lifted for a good reason: to keep people insured during a public health emergency. Congress then extended the expanded eligibility through 2025.

The sensible measure addressed one of the landmark health law’s shortfalls. Health insurance is increasingly expensive. Even those with middle-class incomes can struggle to buy coverage. That’s especially true for those who buy a plan on their own because they shoulder the total price of their premiums, unlike those who get coverage through their jobs, where there’s an employer contribution to offset monthly premium bills.

The early retirees, farm families and business owners mentioned above are among those helped most by the expanded aid. About 90,000 Minnesotans benefited.

But this expanded eligibility sunsets this year. Unfortunately, neither the U.S. House or Senate has included this provision in their versions of the reconciliation bill, a serious error that could potentially cause consumers to forgo coverage because it’s too expensive.

The aid’s expiration is especially ill-timed, as the Minnesota Department of Commerce made clear last week. Health insurance costs for 2026 are projected to jump significantly in Minnesota, according to a new analysis.

“Insurers have proposed average increases ranging from 7%-26% for the 187,000 Minnesotans who buy insurance on the individual market,” according to the Commerce Department. Just one insurer, Quartz Health Plan, has proposed a single-digit average rate change (7.2%) from 2025 to 2026.

Large carriers, such as Medica and Blue Plus, are proposing average rate changes of 26% and 16.6%, respectively. Close behind are UCare at 14.8% and HealthPartners at 12.1% and 14.5%.

“It’s a perfect storm that will make health insurance more expensive for Minnesotans: higher rates coming just as enhanced federal tax credits that have helped keep premiums more affordable will expire,” said MNsure CEO Libby Caulum in a statement. MNsure is the state’s online insurance marketplace. The Affordable Care Act’s consumer aid is only available for plans purchased through MNsure.

There’s some comfort in knowing the rates would have been even higher had it not been for a smart move by Minnesota lawmakers in the just-ended session. Legislators renewed a program called “reinsurance” that uses public dollars to cushion insurers and the relatively small number of people in the individual market from rate hikes necessitated by some very high-cost enrollees.

Without reinsurance renewal, “individual market premiums would have been 25% higher on average,” according to a Commerce Department analysis.

Still, the contrast between Minnesota lawmakers’ consumer-conscious work and congressional inaction is frustrating. The national uninsured rate stands at 7.7%, a historic low, reports the U.S. Department of Health and Human Services.

Not renewing the expanded aid puts that at risk, reversing hard-won gains, according to a December 2024 Congressional Budget Office (CBO) report. “Without a permanent extension, CBO estimates, the number of uninsured people will rise by 2.2 million in 2026, by 3.7 million in 2027, and by 3.8 million, on average, in each year over the 2026-2034 period.”

In an interview, Minnesota Commerce Commissioner Grace Arnold said that all consumers should be concerned, not just those who buy on the individual market.

“If you have coverage losses in one place, [the impact] shows up everywhere,” Arnold told me.

If people aren’t insured, they may still wind up needing care. No coverage means the risk of uncompensated care goes up for medical providers, who in turn have to find a way to pay for this. One option: raising care costs, which may be passed along through higher rates for all insurance consumers, including those with coverage through their jobs.

Uncompensated care could also increase already intense pressures on hospitals’ bottom lines. That’s the last thing that struggling rural hospitals especially need right now.

“You may think it doesn’t matter to you. But it does, because it matters to all of us,” Arnold said.

The cost of extending the assistance isn’t cheap. The CBO puts a $335 billion price tag on doing so over a 10-year period. But keeping people insured is a worthwhile investment to maintain in order to keep families in Minnesota and elsewhere covered and prevent uncompensated care from driving up everyone else’s insurance costs.

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