A Minnesota Senate subcommittee on Wednesday heard testimony from hospitals, insurance experts and business owners on the anticipated changes to the state’s health insurance landscape in 2026.
“This week, Minnesotans who purchase insurance on the individual market are beginning to shop for the plans they’ll use next year,” said Sen. Lindsey Port, DFL-Burnsville, chair of the Subcommittee on the Federal Impact on Minnesotans and Economic Stability. “And they’re getting hit with the sticker shock at the prices that they’re seeing.”
One of the biggest changes the subcommittee discussed was the enhanced advance premium tax credit, which is set to expire 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. (Other tax credits, which are still active, apply to those making less than 400% FPG.)
Roughly half of the 187,000 Minnesotans who purchase their health insurance through the individual market will be affected by the tax credit’s expiration, said Grace Arnold, commissioner of the Minnesota Department of Commerce.
“Minnesota (is) estimating that 90,000 Minnesotans will see a cost increase averaging $2,000 a year,” she said.
This change coincides with a 21.5% average increase in individual market plan premiums for 2026, Arnold said.
Because some younger, healthier adults are expected to become uninsured due to these higher costs, Arnold said the overall health insurance will have a higher proportion of sicker, older enrollees who utilize more health care services, leading to rate increases.
“Many individuals and families with incomes below that 400% threshold will see cost increases,” said Libby Caulum, CEO of MNsure, the state’s independent health insurance marketplace.
Caulum used the example of a family of four living in Freeborn County. Their household income is $105,000, or 325% of the Federal Poverty Guidelines.
“In 2025, they pay $143 per month after their tax credits,” she said. “If they select the same plan for 2026, they will still receive some tax credits, but their net premium will more than triple to $490 per month.”
The hearing took place one day after MNsure shoppers could begin previewing their 2026 plan options. Open enrollment begins Nov. 1.
Caulum, Arnold and other testifiers also spoke to the projected impact of federal Medicaid changes — passed into law through President Donald Trump’s One Big Beautiful Bill Act — on health care costs.
“There’s some estimates that Minnesota could lose up to $154 million just in fiscal year 2026,” said Lynn Blewett, a professor at the University of Minnesota’s School of Public Health, “and an estimated increase of uninsured of 170 (thousand) to 180,000 individuals could lose coverage, and those are primarily from work requirements … and new verification requirements.”
The effects of higher health insurance costs go beyond individual payers — hospital leaders and business advocates shared with the subcommittee how they will be impacted.
With reduced Medicaid enrollment, the Minnesota Hospital Association estimates that the state’s hospitals will collectively lose, per year, $354 million in lost Medicaid payments, and will pay $269 million more in charity care — financial assistance for low-income patients.
“The nonprofit hospitals and health systems in Minnesota are already in a pretty precarious position,” said Mary Krinkie, vice president of government relations at the MHA. “We know that we will be forced to close additional services if these cuts come to full fruition.”
For Zander Abbott, president and CEO of Northfield Hospital and Clinics, service line closures at other rural hospitals in the area will result in higher demand at remaining facilities.
“We’re not going anywhere,” he said. “We’re going to be around to serve the people in our communities, but this is making it harder and harder.”
In her closing comments, ranking minority member Sen. Carla Nelson, R-Rochester, made the case for focusing on how Minnesota can respond to rising health care costs, referencing previous state budget surpluses that weren’t directed toward health care and the millions of dollars lost to recent fraud events.
“We want to point our finger at Washington, D.C. and, well, we don’t have that control there,” she said. “I want us to focus on those things that we can control right here in Minnesota.”
Nelson also 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; the core issues underlying the shutdown, for U.S. Senate Democrats, are the enhanced tax credit renewal and undoing the Medicaid cuts passed earlier this year. A continuing resolution to fund the government needs 60 votes in the Senate to pass.
“When you need the votes, you have to earn the votes,” Port said of Senate Republicans. “You have to talk with people, you have to compromise.”
The subcommittee, formed within the state Senate’s Committee on Rules and Administration, had its first hearing on Oct. 1, centered on federal cuts to the Supplemental Nutrition Assistance Program, or SNAP. No other hearings are scheduled as of Wednesday.
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