What Happened?
The American Rescue Plan Act (ARPA) of 2021 provided enhanced premium tax credits that made health insurance significantly 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, Congress did not pass an extension. The subsidy rules have reverted to the original pre-2021 ACA structure, which includes the 400% Federal Poverty Level (FPL) "subsidy cliff."
For Minnesota specifically, this coincides with the largest premium increases since 2017, averaging 21.5% across all individual market insurers. Minnesota Commerce Commissioner Grace Arnold called the increases "a real gut punch" for Minnesota families.
Key Changes in 2026
❌ What's Gone (ARPA Benefits Lost)
- Enhanced tax credits above 400% FPL
- 8.5% income cap on premiums
- Subsidies for higher earners (above 400% FPL)
- Average $500/month in enhanced credits
✓ What Remains (Standard ACA Benefits)
- Standard premium tax credits (under 400% FPL)
- Cost-sharing reductions for Silver plans
- Pre-existing condition protections
- MN Reinsurance (20-25% premium reduction)
2026 Minnesota Premium Increases by Insurer
The Minnesota Department of Commerce approved final 2026 rates on October 1, 2025, effective January 1, 2026:
| Insurer | Final Approved Rate Change |
|---|---|
| Medica Insurance Company | +30.76% |
| UCare | +27.48% |
| HealthPartners Insurance Co. (New to exchange) | +19.15% |
| Blue Plus (BCBS MN) | +18.70% |
| HealthPartners, Inc. | +13.31% |
| Quartz Health Plan MN | +7.40% |
Note: All insurers received higher final approvals than originally proposed in July 2025. UCare's final rate jumped 12.69 percentage points above its initial proposal.
The "Subsidy Cliff" Explained
With ARPA expiration, the 400% Federal Poverty Level threshold has been reinstated. If your income is even $1 above 400% FPL, you receive ZERO premium subsidies—regardless of how expensive your coverage is.
| 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: 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 enhanced credits, their premiums would have been capped at 8.5% of income (~$7,225).
Who Is Affected?
MNsure official data confirms the scope of impact:
- ~89,000 Minnesotans (62% of MNsure enrollees) will receive decreased subsidies
- ~19,500-20,000 will lose ALL financial assistance entirely
- ~62,000 may drop private coverage entirely (RAND projection)
- 187,000 total in Minnesota's individual market
Hardest Hit Groups
- Greater Minnesota residents: Often face higher premiums due to fewer provider options
- 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
Critical Dates
What You Can Do Now
Check Your Eligibility
Visit MNsure.org or use Navitize's calculator to see your exact subsidy amount for 2026.
Compare Plans Carefully
Consider switching to a different metal tier or insurer. A Bronze plan may save money if you're healthy.
Check for Medicaid/MinnesotaCare
If income dropped, you may now qualify for Medical Assistance or MinnesotaCare with lower costs.
Consider an HSA Plan
High-deductible plans with Health Savings Accounts can reduce taxable income and save long-term.
Act Before January 15
Open enrollment ends January 15, 2026. Missing this deadline means waiting until next year.
Get Free Help
MNsure navigators and brokers provide free assistance with enrollment. Don't navigate this alone.
Minnesota's Response
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
However: Minnesota has not enacted a state-funded subsidy program to replace the expired federal enhanced credits. Commerce Commissioner Arnold stated: "Minnesota shouldn't have to cover for a broken federal government."
Additional Resources
- MNsure: www.mnsure.org — Official Minnesota health insurance marketplace
- Find a Navigator: MNsure Navigator Finder — Free enrollment help
- MN Commerce: mn.gov/commerce — Insurance rate filings
- Navitize: learn.navitize.com/crisis — Crisis calculator and resources