Commissioner Grace Arnold of the Minnesota Department of Commerce told the subcommittee on federal impacts that the department’s review of insurer filings shows large rate increases in the private individual market for 2026 and that federal policy changes are a key driver.

“On average, we are seeing a 21.5% increase” in the individual market for plan year 2026, Commissioner Grace Arnold said. She told lawmakers that small-group plans are seeing smaller but still significant increases, and that those figures are gross averages because individual premiums vary by age, geography and eligibility for premium tax credits.

Why it matters: MNsure, the state’s health insurance marketplace, said the scheduled expiration of the enhanced premium tax credits at the end of the calendar year will push many households to higher net premiums and could make coverage unaffordable for some. Libby Cullum, chief executive officer of MNsure, said the combination of rate hikes, the tax-credit sunset and other new federal enrollment and eligibility rules could cause a large drop in enrollment and a spike in out-of-pocket costs for many Minnesotans.

The hearing laid out a mix of technical and policy drivers behind the rate changes. Arnold emphasized three main factors: higher underlying health care costs (new therapies and an aging population), federal policy changes that reduce financial help and administrative ease for consumers, and market dynamics that shift risk into a sicker enrollee pool. Arnold said Minnesota’s reinsurance program has been stabilizing premiums, “and it’s something we can be proud of,” but she cautioned reinsurance alone will not offset the larger federal changes.

MNsure provided examples showing how the loss of enhanced tax credits affects different households. Cullum described a hypothetical family of four in Freeborn County at 325% of the federal poverty level who now pay about $143 a month after credits; MNsure estimates their net premium for the same bronze plan could rise to roughly $490 a month in 2026. She said people who earn more than 400% of the federal poverty level will lose all eligibility for premium tax credits under current federal law and that many people who remain eligible will still see much smaller credits.

Federal-policy specifics raised by MNsure and other witnesses included the scheduled end of the pandemic-era premium enhancements, limits on automatic reenrollment (effective 2028), a shorter open-enrollment window beginning with plan year 2027, new immigration-related eligibility limits (affecting some lawfully present populations and certain DACA recipients), and a CMS increase to the allowable out-of-pocket maximum (to $10,600 for 2026).

Professor Lynn Blewett of the University of Minnesota School of Public Health framed the changes in historical context, noting the Affordable Care Act’s market reforms and the substantial role premium tax credits have played in affordability. She and Cullum stressed that marketplace subsidies were central to lowering net premiums for many households and that the expiration of the enhanced credits will have broad effects on access, churn and uncompensated care.

What consumers should know: MNsure’s preview tool and plan previews for 2026 are live, and official open enrollment begins November 1. Cullum urged Minnesotans to shop and compare plans and, if eligible, consult MNsure-certified brokers.

The subcommittee did not adopt any formal state action at the hearing. Lawmakers asked officials for follow-up materials including the department’s analysis under an assumed extension of the enhanced credits and further detail on insurers’ assumptions about enrollment and reinsurance impacts.

Open questions noted by officials included how quickly federal action could change assumed law, and — if tax credits are extended late in the year — the technical and timing challenges of producing corrected, consumer‑facing plan price displays in the short window before open enrollment.