Health insurers propose hiking Minnesota prices at least 14% next year

Health insurance could be getting a lot more expensive in Minnesota next year.

The four largest carriers in the state’s individual health insurance market are seeking double-digit percentage rate increases for 2026, according to preliminary figures released Tuesday by the Minnesota Department of Commerce.

On the surface, the jumps would be limited to a relatively small slice of the state’s health insurance landscape — the market where people who don’t have job-based coverage and don’t qualify for Medicare or Medicaid coverage shop for coverage, sometimes referred to as “Obamacare” exchanges.

Yet these individual market rates often serve as a bellwether for pricing trends in the wider market for health insurance.

Commerce announced proposed increases by Medica (+26%), Blue Cross and Blue Shield of Minnesota (+16.6%), UCare (+14.8) and HealthPartners (14.5%).

“They are the largest proposed rate increases we’ve seen, on average, since 2017,” Julia Dreier, deputy commissioner of insurance at the Commerce Department, said in an interview. “We can tell that the morbidity is higher in the proposed rates. In other words, the health insurance companies are assuming that the risk pool is going to be sicker, on average, than it has been in the past.”

Across the country, double-digit percentage increases proposed in the individual market for 2026 have been common, according to a report earlier this month from California-based KFF. One common driver is the expected expiration of enhanced federal tax credits available to individual market shoppers, which accounts for about 4 percentage points of growth across insurers.

These enhanced subsidies, which were created during the early years of the COVID-19 pandemic, extended tax credit eligibility to people with higher incomes. Minnesota estimates that, without the enhancements, about 19,000 people here will lose access to financial help.

The lack of subsidies in this group, as well as proposed federal rules to tighten sign-up periods and increase income verification rules, could well mean that healthier people in the market drop coverage. The changes mean the individual market’s status this year as bellwether is somewhat diminished.

“Obviously, health care costs continue to increase and that’s included in these calculations,” Dreier said of the rate proposals released Tuesday. “There are a lot of extenuating circumstances in the individual market this year, in particular, due to proposed federal changes.”

Tax credits for most in the market are made available through the federal Affordable Care Act, so long as they purchase through health insurance exchanges such as MNsure. The subsidies for these consumers mean most won’t actually see the rate increases themselves.

“These rate changes do not reflect the impact of federal premium tax credits that are available to eligible Minnesotans who purchase their coverage through MNsure,” the Commerce Department said in a statement.

“It is important to note these are the initial rates proposed by the insurers and filed with [the state],” the department said. “Rates are subject to review and approval by the Departments and the final approved rates may vary from these proposed rates for many reasons.”

This is a developing story. Check back for updates

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