Minnesota Capitol Hearing Grapples with Deteriorating Health Insurance Landscape
A Minnesota Senate subcommittee convened on Wednesday to discuss the anticipated changes to the state’s health insurance landscape in 2026, with hospitals, insurance experts, and business owners providing testimony. The hearing comes as Minnesotans who purchase insurance on the individual market begin to shop for plans for next year, only to be met with sticker shock at the prices they’re seeing.
According to Sen. Lindsey Port, DFL-Burnsville, chair of the Subcommittee on the Federal Impact on Minnesotans and Economic Stability, roughly half of the 187,000 Minnesotans who purchase their health insurance through the individual market will be affected by the expiration of the enhanced advance premium tax credit at the end of 2025. This tax credit reduces the cost of monthly premiums for those making more than 400% of the Federal Poverty Guidelines.
Impact on Minnesotans
Commissioner of the Minnesota Department of Commerce, Grace Arnold, estimated that 90,000 Minnesotans will see a cost increase averaging $2,000 a year due to the tax credit’s expiration. This change coincides with a 21.5% average increase in individual market plan premiums for 2026, Arnold said. As a result, some younger, healthier adults are expected to become uninsured due to these higher costs, leading to a higher proportion of sicker, older enrollees who utilize more health care services, and ultimately, rate increases.
Libby Caulum, CEO of MNsure, the state’s independent health insurance marketplace, provided an example of a family of four living in Freeborn County, with a household income of $105,000, or 325% of the Federal Poverty Guidelines. In 2025, they pay $143 per month after their tax credits, but if they select the same plan for 2026, their net premium will more than triple to $490 per month, despite still receiving some tax credits.
Projected Impact of Federal Medicaid Changes
The hearing also addressed the projected impact of federal Medicaid changes, passed into law through President Donald Trump’s One Big Beautiful Bill Act, on health care costs. Lynn Blewett, a professor at the University of Minnesota’s School of Public Health, estimated that Minnesota could lose up to $154 million in fiscal year 2026, and an estimated 170,000 to 180,000 individuals could lose coverage, primarily due to work requirements and new verification requirements.
Hospital leaders and business advocates shared their concerns with the subcommittee, citing reduced Medicaid enrollment and the resulting financial losses for hospitals. The Minnesota Hospital Association estimates that the state’s hospitals will collectively lose $354 million in lost Medicaid payments and pay $269 million more in charity care per year. Mary Krinkie, vice president of government relations at the MHA, warned that nonprofit hospitals and health systems in Minnesota are already in a precarious position and may be forced to close additional services if these cuts come to fruition.
Call to Action
In her closing comments, ranking minority member Sen. Carla Nelson, R-Rochester, emphasized the need for Minnesota to focus on responding to rising health care costs, rather than relying on federal lawmakers to address the issue. Nelson advocated for federal lawmakers to end the government shutdown and renew the enhanced tax credit. After the hearing, subcommittee DFL members addressed the federal government shutdown, citing the core issues underlying the shutdown, including the enhanced tax credit renewal and undoing the Medicaid cuts passed earlier this year.
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