Thousands potentially facing increase to health insurance rates

Hundreds of thousands of Minnesotans could see health insurance costs rise in 2026 because of federal policy changes and rising costs.

The Minnesota Department of Commerce is citing proposals from insurance agencies with some double-digit increases.

These proposed increases would only impact those who buy individual or small group health insurance through MNsure or directly through insurers. 

Some Minnesotans explained they can’t afford another rising cost.

At Superior Skin Aesthetics in St. Paul, Laurell Natalie specializes in skin transformations.

“I love to help people. I do a lot of acne clients, so it really helps change their whole entire life,” Natalie, Superior Skin Aesthetics owner and esthetician, said.

Running your own business has its perks, but there are some downsides. She said one of them is doing everything yourself.  

As a single mom with three kids, Natalie said the state health insurance, MNsure, makes life more affordable for her family, but next year she could see an increase.

“That would be probably very, very hard for me to keep my business open,” Natalie said. “We shouldn’t have that stress in our life to have to wonder if we can even go to the doctor or not.”

The state Department of Commerce said in a statement on their website that thousands of families, small business owners and farmers across Minnesota may have to pay an average of $200 more every month for coverage.

The state agency says provisions in federal reconciliation bills, if passed, will get rid of financial help that reduces monthly premium costs.

The Minnesota Council of Health plans said insurers are responding to the growing uncertainty in the marketplace across the board. 

“The cost of care is going up, utilization is going up, said Lucas Nesse, with the Minnesota Council of Health Plans.

Under the proposal from insurers, rates could go up 7 to 26% in the individual market
and 7 to 17% for small group plans.

“We’re not talking about profits here. We’re talking about the high cost of care. The nonprofit margins have historically been in the 1 to 3% range, which is really the bare minimum for reinvesting and enhancing services,” Nesse said.

Nesse explained that a lot of uncertainty in the marketplace needs to be understood before the rates are finalized by the fall.

When they’re approved, they will apply to coverage in January 2026.

Full Statement from MNCare:

“We understand that consumers may be concerned if they see headlines about potential health insurance rate increases. And if Congress doesn’t extend the enhanced tax credits that are currently helping nearly 90,000 Minnesotans afford their health insurance, consumers could see a dual impact on affordability.

The good news is that when Minnesotans shop and compare health plans at MNsure.org, they can access financial help to lower the cost of their monthly premiums by more than $500, on average. MNsure is still the only place this help is available, and most MNsure enrollees qualify.” 

Full Statement from the Minnesota Department of Commerce:

“Proposed rate hikes for 2026—as high as 26% in the individual market and 17% in the small group market—stand to impact health insurance affordability for thousands of families, small business owners, and farmers across Minnesota. These increases are made worse by federal policies.

Provisions in the U.S. House-passed and Senate-proposed reconciliation bills raise out-of-pocket costs for consumers, lower the overall value of the insurance plans sold on the market, and eliminate the ability of many Minnesotans to automatically renew their insurance. Minnesotans will also experience higher prices if, as currently laid out in the reconciliation bills, the programs offering additional financial help to reduce monthly premium costs are allowed to expire.

This is more than a policy issue—it’s a pocketbook issue that impacts the financial stability and health care security of Minnesotans. When premiums rise and benefits shrink, the real cost is paid in delayed care, reduced access, and increased medical debt.

Minnesota has acted decisively to protect residents by extending the Minnesota Premium Security Plan, a bipartisan effort that offsets high-cost claims and stabilizes premiums in the individual market. Without the program, those premiums would have risen 25% higher than the proposed rates. But state solutions alone can’t undo the damage being done in Washington.

We urge federal lawmakers to restore and extend critical support that helps keep health insurance within reach. Minnesotans deserve better than paying more for less coverage.”