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Beki Cook holds her medication for hereditary angioedema at her kitchen table on Wednesday, Oct. 29, 2025, in St. Paul, Minn. The once-per-day medication, which keeps her symptoms of unpredictable swelling in various parts of her body at bay, costs about $1,600 per pill without insurance. Credit: Ellen Schmidt\/MinnPost\/CatchLight Local\/Report for America<\/p>\n
Those costs get indirectly passed on to Cook, who pays a $1,000 monthly premium for a health plan she bought for herself and her twins on MNsure, the state-run health insurance marketplace that stemmed out of the Affordable Care Act.\u00a0<\/p>\n
Cook checked the MNsure website<\/a> and said that next year her premium is set to shoot up to $1,400-a-month.\u00a0<\/p>\n Related: 90,000 Minnesotans face big health insurance premium hikes without congressional action<\/a><\/p>\n \u201cWe are fortunate that I do not have to choose between food and health insurance, but it does make it harder to help our children pay for college tuition,\u201d said Cook, who talked as she peered at a spreadsheet of family finances. \u201cWhere does this new number come from?\u201d<\/p>\n The short answer is demographics, drug prices and a sunsetting Covid-era federal subsidy<\/a>, all of which have combined to cause MNsure enrollees\u2019 projected premiums to skyrocket by an average of 57% next year.\u00a0<\/p>\n The period to enroll (or reenroll) in a MNsure plan starts Saturday, Nov. 1, and ends Jan. 15.<\/p>\n The much discussed federal subsidy, whose Dec. 31 expiration strikes at the heart of the budget stalemate that led to the federal shutdown<\/a>, is \u201conly part of the answer\u201d for mind-boggling health insurance hikes, said Jean Abraham, a professor at the University of Minnesota School of Public Health.\u00a0<\/p>\n \u201cHealth care inflation has gone up. General inflation has gone up, and individuals are being asked to pay more,\u201d said Abraham, especially for pricey drugs from Orladeyo to Ozempic.<\/p>\n Here is a look at why many of the 167,000 Minnesotans on MNsure may face a health insurance affordability crisis in 2026.<\/p>\n Who gets their health insurance from MNsure?<\/p>\n People are on the 12-year-old MNsure program because they do not get health insurance from their employer. They also make too much to qualify for Medical Assistance, the state\u2019s Medicaid program<\/a>, or MinnesotaCare, which offers health plans to residents who make less than 200% of the federal poverty level.<\/p>\n \u201cTypically, the individual market enrollees include farmers, independent contractors or gig workers, small business owners and some of their staff, and early retirees,\u201d said Grace Arnold, commissioner of the Minnesota Department of Commerce, at a Senate Subcommittee on Federal Impacts hearing<\/a> earlier this month.\u00a0<\/p>\n (Ultra-wonky note: \u201cIndividual market\u201d is not exactly synonymous with MNsure enrollees. A few thousand Minnesotans each year directly get a health plan from an insurer instead of going through MNsure.)\u00a0<\/p>\n Cook, for example, does not work enough hours to qualify for health insurance through her preschool, and the family plan offered through her husband\u2019s employer \u201cis ridiculously expensive,\u201d she said.<\/p>\n So, she gets a gold plan from Minneapolis-based insurer UCare, knowing she will need to frequently use her health insurance and that the lower premiums but higher copays from the silver and bronze plans would cost her more.\u00a0<\/p>\n MNsure enrollees choose between various gold, silver or bronze plans offered by five insurers, each of them nonprofits \u2014 BCBS MN, Health Partners, Medica, Quartz and UCare.\u00a0<\/p>\n Why is what health insurers charge going up?\u00a0<\/p>\n What MNsure customers pay on their monthly premium is the result of what can be roughly called a five-step process.\u00a0<\/p>\n In the first step, insurers negotiate with pharmaceutical companies and health care providers on prices for prescription drugs and medical care.\u00a0<\/p>\n Secondly, the insurers present the results of their dealmaking to the Minnesota Department of Commerce, essentially saying this is how much they need to raise their rates to break even.\u00a0<\/p>\n Commerce officials review and ultimately approve these rates. Officials check on the accuracy of assumptions insurers made about the coming year\u2019s health care economy.\u00a0<\/p>\n Throughout the 2020s, MNsure insurers\u2019 rates inched up yearly by single-digit percentage points. But the 2026 rate hikes Commerce approved average out to a startling 21.5% increase.\u00a0<\/p>\n \u201cThe rate increases are really alarming and will have a significant impact on Minnesotans,\u201d Arnold said at the Senate hearing. \u201cThese hikes will push real people to make really hard choices like paying for health insurance, rent or a car payment.\u201d<\/p>\n Julia Dreier, deputy commissioner of insurance at the Commerce Department, said in an interview that Commerce nonetheless felt compelled to approve the rate leaps. Without the hikes, the rising cost of health care could cause the insurers to lose money and struggle to operate, Dreier said.\u00a0<\/p>\n As to why health care costs rose so sharply in the past year, Drier gave a few factors. One is that MNsure enrollees are getting older. Many are early retirees waiting until they turn 65 years-old to enroll in Medicare.\u00a0<\/p>\n \u201cMinnesota\u2019s individual market does skew a little bit older than a lot of the other individual markets across the country,\u201d Dreier said.\u00a0<\/p>\n Another reason is a national trend that affects health plans both on MNsure and other ACA marketplaces<\/a> as well as employer-based plans<\/a>: Prescription drug costs are soaring.\u00a0<\/p>\n \u201cThere\u2019s incredible cost pressure coming from for-profit pharmaceutical companies trying to charge as much as they can,\u201d said Lucas Nesse, president and CEO at the Minnesota Council of Health Plans, a lobbying group for nonprofit health insurers.\u00a0<\/p>\n Pharmaceutical companies ratcheting up the cost of health care is a tale as old as time. But there are specific drugs that have roiled costs in the past year. These include GLP-1\u2019s like Ozempic<\/a> becoming mainstream<\/a>, and drugs for rare conditions like the one Cook takes.\u00a0<\/p>\n \u201cPrescription drugs are just a lot more expensive and more specific, so you have things like biosimilars and certain types of cancer treatments that are really driving up the costs,\u201d Dreier said.\u00a0<\/p>\n Dreier is referring to treatments like CAR-T cell therapy, which replicates a person\u2019s immune cells. The price for the replicative cells alone is up to $475,000, according<\/a> to the American Cancer Society.\u00a0<\/p>\n Insurers must decide which plans will cover such a treatment, and, if it is covered, how to distribute the treatment cost across its pool of consumers.\u00a0<\/p>\n \u201cInsurance in its simplest form is trying to negotiate discounts in return for volume,\u201d Nesse said. \u201cBut some of these products are very limited in nature.\u201d<\/p>\n What turned this 21.5% higher insurance rate into a staggering 57% leap in monthly premiums?<\/p>\n Again, determining MNsure monthly premiums is about a five-step process. Steps three and four factor in state and federal subsidies.\u00a0<\/p>\n \u201cThere\u2019s the rate increases,\u201d said Libby Caulum, CEO of MNsure, in an interview. \u201cAnd there\u2019s what people actually pay.\u201d\u00a0<\/p>\n The last time MNsure insurers had such a steep rate increase was 2017. In response that year, the Minnesota Legislature created a program<\/a> called reinsurance, a fund<\/a> that uses taxpayer money to cover pricey claims MNsure enrollees file with their insurer.\u00a0<\/p>\n Specifically, the state pays around 80% of the cost for claims between $50,000 and $250,000. Insurers must pass the savings on to their overall consumer pool.\u00a0<\/p>\n Reinsurance \u201chelps to offset some of those expensive claims for carriers, and, then, as a result of that program, it helps to keep rates lower,\u201d Dreier said.\u00a0<\/p>\n Indeed, reinsurance means that while MNsure enrollees might see a monstrous spike in their premiums, marketplace enrollees nationally have it way worse. Nonprofit research group KFF projects<\/a> a 114% climb in average monthly premiums for marketplace customers across the country.\u00a0<\/p>\n This jump bakes in the swan song of a massive, four-year-old federal subsidy called the enhanced premium tax credit<\/a>.<\/p>\n