pustosh / Depositphotos.com
ST. PAUL, Minn. (Minnesota Reformer) – Hundreds of thousands of Minnesotans are facing significantly more expensive health insurance next year.
The average increase for individual and small group insurance plans is 17% for 2027, the state’s Department of Commerce announced Thursday, raising costs for the 203,000 and 184,000 Minnesotans covered by individual and small group plans respectively.
Individuals and their families who are not covered by their employer or by public programs — like Medicare, Medicaid (called Medical Assistance in Minnesota) and MinnesotaCare — buy individual plans from health insurers through MNsure, the state’s Affordable Care Act marketplace. Many people using MNcare can get discounts on their insurance premiums — what people pay upfront to be insured — if they make below a certain income.
The rate hikes come at the same time as significant shifts in the individual marketplace from federal policy: Republicans blocked Democratic efforts to extend “enhanced” premium discounts — delivered through tax credits — into 2026, resulting in the amount of discounts and the number of people who can receive those discounts to drop this year. (People can also buy individual health plans outside of MNsure, though they would be unable to get tax credits to offset premium costs.)
Health insurers have raised rates by double digit increases for two years in a row. Last year, individual rates went up 22%, while rates for small groups — which refers to businesses with fewer than 50 people — went up an average of 14%. Increases in the year before that were less extreme.
In a press release, Julia Dreier, the Department of Commerce’s temporary commissioner, attributed the eyewatering cost spikes to “broad changes across our health care system,” including the high prices of medical visits and drugs, people using more healthcare, and “the growing role of profit-driven entities in the delivery and financing of care.”
Only some health insurance companies are approved to sell coverage to individuals and small groups. The Department of Commerce releases the average rate increases for each health insurer, which range from 10% to 21% for 2027. HealthPartners, in the individual market, and UnitedHealthcare, in the small group market, both posted average increases exceeding 21%.
The same day the rate increases were announced, health economists from the University of Minnesota and the University of Southern California spoke at a state Senate human services committee hearing about how hospital consolidation drives up healthcare prices, which in turn drives up insurance prices. Mergers are being proposed at what Erin Conti of the Minnesota Attorney General’s Office called a “breakneck pace” in 2026, with a new merger announced just this week between Essentia and HealthPartners, two Minnesota-based health systems.
Glenn Melnick, a professor at USC, referred to increasingly expensive insurance premiums as a “hidden tax” in employment-based health insurance, where health insurance premiums are either taken out of paychecks or paid by employers, both resulting in lower pay for workers.
Melnick also noted that as insurance rates balloon, the same rate increases refer to larger and larger dollar amounts over time, making it more difficult to curb costs. In other words, since health insurance premiums are so expensive, even 10% growth now means families need to shell out — or sacrifice in wage growth — an additional couple thousands of dollars for higher insurance premiums every year.
Melnick and other health economists point to high hospital prices as a major driver of healthcare prices and, by extension, insurance prices. “If we don’t control hospital spending, we’re not going to effectively control overall healthcare spending,” Melnick said.
The increases come in the heat of midterm elections, and candidates were quick to blame the opposition for the ballooning costs, often in broad terms.
Republican House Speaker Lisa Demuth, who is running for governor against Democratic Sen. Amy Klobuchar, released a statement: “There is one person in this race responsible for the rising cost of health insurance: Amy Klobuchar. Twenty years ago U.S. Senate candidate Amy Klobuchar promised us lower health insurance costs, but they have skyrocketed over the two decades she’s been in Washington DC.”
Klobuchar, Minnesota’s senior senator, also released a statement. She blamed healthcare cuts from President Donald Trump’s One Big Beautiful Bill Act for the rate hikes: “Minnesotans cannot afford a governor whose only plan for their health care is to double down on the Trump policies that are making healthcare more expensive and out of reach in our state and across the country.”
Klobuchar also reiterated her promise, if elected governor, to enact state-level tax credits if federal enhanced premium tax credits aren’t restored.
The Minnesota Council of Health Plans, the trade group for health insurers here, released a statement attributing cost increases to high prices and usage of medical services and prescription drugs.
The trade group also pointed to administrative changes by the Department of Commerce requiring insurers to define in-home nursing care visits as being up to 24 hours a day.
Insurers had fully covered in-home nursing care for 15 years, following a 2010 state law requiring them to cover medically necessary nursing care. For 2026 plans, though, some insurance companies placed caps on how much in-home care a person could receive, including enforcing a cap of 120 nursing care visits that may have existed previously but was not enforced, according to the previous Commerce commissioner. Bipartisan legislators tried to remove those caps in the 2026 legislative session, but failed to pass a bill. Sen. Liz Boldon, DFL-Rochester, an author of that bill, said that she’s still waiting for plans to be released to see if the Department of Commerce has indeed required insurers to fully cover in-home nursing care.
“For them to say that they are increasing rates because of this care is nonsense to me, because they have been covering it for the last 16 years,” Boldon said in a phone call. “It is not a new thing.”
In an email, a Department of Commerce spokesperson said that the department ensured that all plans now recognize a visit as being up to 24 hours a day, but that policy of allowing a 120 visit cap did not change.
An analysis from the Peterson Center on Healthcare and KFF found that across the country, ACA marketplace insurers proposed a median increase of 15%, largely driven by higher prices of medical care.
Open enrollment for individuals shopping for health insurance begins Nov. 1.
Comments