Minnesota's 2026
Health Insurance Crisis
ARPA enhanced subsidies expired December 31, 2025, and the One Big Beautiful Bill Act (OBBBA) signed July 2025 brings additional ACA cuts. Nearly 90,000 Minnesotans face an average $177/month premium increase (22% avg rate hike). MNsure enrollment dropped 8% to 139,251 for 2026.
What Happened?
Two federal actions created a perfect storm for Minnesota health insurance
The American Rescue Plan Act (ARPA) of 2021 provided enhanced premium tax credits that made health insurance more affordable for millions of Americans. These enhancements were extended through the Inflation Reduction Act until December 31, 2025.
As of January 1, 2026, these enhanced subsidies have expired. Despite multiple legislative attempts — including the Lower Health Care Costs Act (S 3385) which failed to reach 60 Senate votes — Congress did not pass an extension. Sen. Bernie Moreno (R-OH), who had pushed for extending the subsidies, stated in February 2026 that any deal to resuscitate them is "effectively over."
Making matters worse, the One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025, brings additional ACA marketplace restrictions starting in 2026 — including elimination of the low-income special enrollment period, removal of subsidies for recent immigrants under 100% FPL, and new barriers for Medicaid enrollees who lose coverage.
For Minnesota specifically, this coincides with the largest premium increases since 2017, averaging 22% across all individual market insurers. MNsure enrollment for 2026 dropped to 139,251 — an 8% decline from 2025 — as thousands found coverage unaffordable.
MNsure 2026 Enrollment Impact
Enrollment dropped despite record outreach efforts
139,251
2026 MNsure Enrollees
↓ 8% from 2025
89,000
Paying Higher Premiums
62% of enrollees
19,501
Lost All Subsidies
Income above 400% FPL
Key finding: Despite premium increases averaging 57% after subsidy expiration, the majority of enrollees did not switch plans. MNsure CEO Nate Caulum noted that "switching health insurance plans can feel really intimidating at times." Data on how many enrollees actually paid their first 2026 premium is expected in mid-March 2026.
Key Changes in 2026
What's Gone (ARPA + OBBBA Impact)
- Enhanced tax credits above 400% FPL (ARPA expired)
- 8.5% income cap on premiums (reverts to 2.1%–9.96% scale)
- Low-income special enrollment period (OBBBA eliminated)
- Subsidies for recent immigrants under 100% FPL (OBBBA)
- Average $500/month in enhanced credits
What Remains (Still Available)
- Standard premium tax credits (under 400% FPL)
- Cost-sharing reductions for Silver plans
- Pre-existing condition protections
- MN Reinsurance (20–25% premium reduction through 2027)
- Expanded HSA eligibility (OBBBA added Bronze/catastrophic plans)
One Big Beautiful Bill Act (OBBBA) Impact
Additional federal changes signed July 4, 2025 affecting Minnesota
The OBBBA (H.R. 11), signed into law July 4, 2025, brings sweeping changes to health coverage on top of the ARPA subsidy expiration. The Congressional Budget Office estimates OBBBA will cut $379 billion in ACA premium subsidies and result in 7 million Americans losing health insurance over the next decade.
For Minnesota specifically, the OBBBA did not extend the enhanced premium subsidies and introduces new restrictions that compound the subsidy cliff impact.
Changes Taking Effect in 2026
- →Low-income SEP eliminated: Year-round enrollment for people under 150% FPL permanently removed
- →Immigrant subsidy restriction: Recent immigrants under 100% FPL lose marketplace subsidy eligibility
- →Premium repayment caps removed: Low-income enrollees who underestimate income face full repayment liability
- →HSA expansion: Bronze and catastrophic plan holders can now contribute to HSAs (positive change)
Coming in 2027 and Beyond
- →Medicaid work requirements: ~243,000 Minnesotans on Medical Assistance will be subject to new requirements
- →Medicaid denied = no ACA subsidies: People denied Medicaid for work requirements also barred from marketplace subsidies
- →Shorter open enrollment: Enrollment windows tightened, automatic re-enrollment eliminated for zero-premium CSR plans
- →MinnesotaCare funding at risk: Cuts to federal pass-through funding could affect ~150,000 enrollees
Check Your Impact
See how the 2026 changes affect your household
2026 Subsidy Impact Calculator
See how ARPA subsidy expiration affects you
Include all income sources for everyone in your household
Include yourself, spouse, and dependents you'll claim on taxes
This calculator provides estimates only. Actual subsidy amounts depend on specific plan costs and other factors. Visit MNsure.org for official calculations.
Who Is Affected?
Hardest Hit Groups
- Greater Minnesota residents: Often face higher premiums due to fewer provider options — Rochester-area enrollees had the highest average tax credits at $834/month
- Adults over 55: A couple in their early 60s in Mankato with $89,000 income could see monthly premiums surge from $474 to approximately $2,000 (322% increase)
- Families just above 400% FPL: Earning $128,601 as a family of 4 means zero subsidy eligibility — the "cliff" returns with no gradual phase-out
- Self-employed and gig workers: Those without employer coverage who rely on MNsure face full premium exposure
2026 Premium Increases by Insurer
Approved by Minnesota Department of Commerce — avg 22% before subsidies
2026 Minnesota Insurer Rate Changes
Approved by MN Department of Commerce, effective January 1, 2026
The "Subsidy Cliff" Explained
Income thresholds that determine your subsidy eligibility in 2026
2026 Federal Poverty Level (FPL) Thresholds
Income above 400% FPL = No subsidy eligibility (the "subsidy cliff")
| Household Size | 100% FPL | 400% FPL (Subsidy Cliff) |
|---|---|---|
| 1 person | $15,650 | $62,600 |
| 2 persons | $21,150 | $84,600 |
| 3 persons | $26,650 | $106,600 |
| 4 persons | $32,150 | $128,600 |
| 5 persons | $37,650 | $150,600 |
| 6 persons | $43,150 | $172,600 |
⚠️ Real Example: The Subsidy Cliff in Action
A 60-year-old couple earning $85,000 (just above 400% FPL for 2 people at $84,600) could face approximately $22,600 annually in premiums — roughly 25% of their income. Under ARPA enhanced credits, their premiums would have been capped at 8.5% of income (~$7,225). That's a difference of $15,375 per year.
💡 New for 2026: HSA Strategy May Help
The OBBBA expanded HSA eligibility to include Bronze and catastrophic plan holders. HSA contributions reduce your modified adjusted gross income (MAGI), which could help you stay below the 400% FPL threshold. A couple maximizing HSA contributions ($8,550 for family coverage in 2026, plus $1,000 catch-up each if 55+) could reduce MAGI by up to $10,550.
Important Dates
Key milestones for 2026 health insurance changes
What You Can Do Now
Steps to protect yourself and find affordable coverage
Check Your Eligibility
Use the calculator above or visit MNsure to see your current subsidy amount and plan options under the new rules.
Visit MNsureCompare Plans Carefully
Consider switching to a different metal tier or insurer. A Bronze or catastrophic plan may save money — and now qualifies for HSA contributions under OBBBA.
Learn About PlansCheck for MinnesotaCare
Income under 200% FPL? MinnesotaCare offers year-round enrollment with lower costs. Not affected by the low-income SEP elimination.
Learn MoreMaximize HSA Contributions
HSA contributions lower your MAGI, potentially keeping you below the 400% FPL subsidy cliff. OBBBA expanded HSA eligibility to Bronze plan holders.
HSA Strategy GuideMissed Open Enrollment?
You may qualify for a Special Enrollment Period with a qualifying life event (job loss, marriage, new baby, moving). Note: income-based SEP no longer available.
Check SEP EligibilityGet Free Help
MNsure navigators and brokers provide free assistance. Don't navigate this alone — especially with the new OBBBA rules.
Find a NavigatorMinnesota's Response
State programs that help reduce costs
Minnesota Premium Security Plan (Reinsurance)
Minnesota's reinsurance program was extended through 2027 during the June 2025 special legislative session. The program has $335.6 million allocated for 2026.
Impact:
- • Keeps premiums approximately 20–25% lower than they would otherwise be
- • Without reinsurance, 2026 premiums would have increased 47% to 69%
- • Helps stabilize the individual market for ~139,000 MNsure enrollees
However: Minnesota has not enacted a state-funded subsidy program to replace the expired federal enhanced credits. The reinsurance program reduces base premiums for everyone, but does not target the subsidy cliff affecting households above 400% FPL.
⚠️ Next Wave: Medicaid Changes (Fall 2026)
MNsure warns that "the federal government is making more changes that will make health insurance more expensive and harder for Minnesotans to get." The first Medicaid changes under OBBBA take effect in fall 2026, potentially affecting over 243,000 Minnesotans on Medical Assistance.
Under OBBBA, individuals denied Medicaid due to new work requirements will also be barred from receiving subsidized ACA marketplace coverage — creating a potential gap where people lose both Medicaid and access to affordable marketplace plans.
Frequently Asked Questions
Common questions about the 2026 health insurance changes
Why did Minnesota health insurance premiums increase in 2026?
Two factors combined: ARPA enhanced premium tax credits expired December 31, 2025, removing an average $500/month in subsidies, and Minnesota insurers raised base rates by an average of 22% (approved by the Department of Commerce). Together, 90,000 MNsure enrollees face an average $177/month increase, and 19,501 lost all subsidy eligibility.
What is the subsidy cliff, and does it affect me?
The subsidy cliff is the income threshold (400% of the Federal Poverty Level) above which you receive zero premium tax credits — not reduced credits, but zero. For 2026, the thresholds are approximately $62,000 for individuals and $128,600 for a family of four. If your household income exceeds these amounts by even $1, you lose all marketplace subsidy eligibility.
How does the One Big Beautiful Bill Act (OBBBA) affect Minnesota health insurance?
The OBBBA, signed July 4, 2025, did not extend ARPA enhanced subsidies and adds new restrictions: the low-income special enrollment period was permanently eliminated, subsidies for recent immigrants under 100% FPL were removed, premium repayment caps for low-income enrollees were eliminated, and Medicaid work requirements (starting fall 2026) will bar denied applicants from marketplace subsidies. The CBO estimates $379 billion in ACA subsidy cuts over 10 years.
Can I still get health insurance if I missed open enrollment?
Yes, but only through a qualifying life event Special Enrollment Period (job loss, marriage, baby, move to new coverage area). The low-income SEP that allowed year-round enrollment for people under 150% FPL has been eliminated by OBBBA. You can also apply for MinnesotaCare (under 200% FPL) or Medical Assistance (Medicaid) at any time — these are not limited to open enrollment.
Will Congress restore the enhanced subsidies?
As of February 2026, it appears unlikely. The Lower Health Care Costs Act (S 3385) failed to reach 60 Senate votes, and Sen. Bernie Moreno (R-OH) stated that any deal to restore enhanced subsidies is "effectively over." The OBBBA, which was the major budget reconciliation vehicle, did not include subsidy extensions. Future legislative action remains possible but no active bills have momentum.
How can I lower my health insurance costs in 2026?
Several strategies: (1) Switch to a lower metal tier like Bronze — now HSA-eligible under OBBBA. (2) Maximize HSA and retirement contributions to reduce MAGI below the 400% FPL cliff. (3) Check MinnesotaCare eligibility if income dropped. (4) Compare all six MNsure insurers — HealthPartners Insurance Company is new for 2026. (5) Contact a free MNsure navigator for personalized guidance.
Additional Resources
Need Coverage? Explore Your Options
Even though Open Enrollment has ended, you may still qualify for coverage through a Special Enrollment Period (qualifying life event required) or MinnesotaCare/Medical Assistance (apply anytime).