Minnesota health insurers hiking premiums in 2025

The majority of health insurers in the state’s individual and small employer health insurance markets will raise premiums an average of 9% to 15% next year, according to data released Friday.

The premium jumps in the individual market will be offset by bigger tax credits from the federal government for those who buy coverage through the state’s MNsure health insurance exchange, officials say.

Even so, the rate hikes are the latest in a string of indicators showing how health insurance costs across the country have risen along with inflation, increased use of medical services and expensive new medications in the years following the COVID-19 public health emergency.

Final rates issued Friday by the state Commerce Department generally fell in line with proposals submitted by health insurers this summer.

“We encourage Minnesotans to start their health insurance shopping at MNsure because of the services available to help consumers explore options and choose the best coverage for themselves and their families,” Commerce Commissioner Grace Arnold said in a statement.

The annual rate release on Friday covers two distinct groups of people — Minnesotans who are covered through individual market policies and those covered by health plans for small groups.

Individual market plans are designed for people who buy their own coverage rather than receiving it through employer-based insurance or government programs such as Medicare, Medicaid and MinnesotaCare.

Average increases in the individual market for next year will range from 8.8% to 11.56% across four health plans. A fifth insurer in the market will raise rates by just 1.95%.

About 186,000 state residents currently are covered by individual policies.

In the small group market, where health plans are designed for employers with two to 50 workers, average rate changes will range from a decline of 6.29% to an increase of 15.82%, although the biggest increase and decrease came from small health insurers.

Three big players in the market, Blue Cross and Blue Shield of Minnesota, HealthPartners and UnitedHealthcare, are raising average premiums anywhere from 11% to 14.59%.

Currently, about 206,000 Minnesotans are covered by small group plans.

Each year, regulators review proposed health insurance plans and rates before they can be sold to try to ensure market stability and compliance with state and federal consumer protection law. The Commerce Department does not set rates, but it determines whether rates proposed by insurers are reasonable.

“Rates must be justified both by the benefits that consumers receive for their premiums and by the insurance company’s ability to pay expected medical claims costs,” the department said in background materials. “Premium rates typically rise each year due to increasing costs and usage of medical care and prescription drugs.”

For 2025, regulators approved the following average increases for health insurers in the individual market:

This is a developing story. Check back for updates.