Op-Ed: Minnesota’s Healthcare Crossroads – Premium Hikes, ACA Evolution, and the Cost of Expansion
Representative Danny Nadeau
Minnesotans are confronting a hard truth this fall: health insurance premiums are climbing by double digits across the individual and small-group markets. For families already grappling with inflation and economic uncertainty, this is more than a budget inconvenience; it is wake-up call about the sustainability of our healthcare system.
When Congress passed the Affordable Care Act (ACA) in 2010, the goal was to make healthcare more accessible, protect people with pre-existing conditions, and bring down costs. While it succeeded in some ways, especially in states like Minnesota that embraced its framework early, it also came with challenges. Through MNsure, our state-based exchange, thousands gained coverage, federal subsidies helped make premiums more affordable, and Medicaid expansion brought coverage to more low-income residents.
Over time, federal enhancements through the American Rescue Plan and the Inflation Reduction Act temporarily boosted subsidies, making coverage even more accessible for middle-income families. These changes were welcome, but they were also expensive and temporary. As federal support begins to taper, the true cost of coverage is re-emerging, and Minnesotans are feeling the pinch.
At the same time, Minnesota has aggressively expanded its public healthcare programs, including Medical Assistance and MinnesotaCare. These programs play a vital role, but their unchecked growth is creating a fiscal imbalance. The state does not cover the full cost of care for enrollees, only about 70 percent for those on Medicaid. This shifts much of the financial burden to hospitals, providers, employers and ultimately to those with private insurance, who pay higher rates to offset the lower Medicaid and Medicare reimbursements. That cost-shifting inflates premiums in the private market, creating a vicious cycle: as more people are priced out of private insurance, they turn to public programs, which further strain the system.
It is important to recognize that things could be worse. Minnesota’s reinsurance program, a bipartisan success story, has played a critical role in stabilizing the individual market since 2017. Reinsurance, in essence, allows the state to cover a portion of the most expensive claims. By helping insurers manage these high costs, it has kept premiums lower than they otherwise would be. Without it, this year’s increases could have been catastrophic, likely closer to 50 percent when combined with the loss of federal subsidies. This program is a clear example of what happens when policymakers come together to solve problems with practical tools instead of politics.
As we look ahead, lawmakers must set aside ideology and commit to using data and evidence to find solutions. Healthcare is too complex, too personal, and too important to be driven by politics alone. We need humility, the kind that allows us to admit we do not have all the answers, and the courage to ask for help from those who do. Minnesota’s healthcare providers, insurers, and community health organizations are not just stakeholders; they are partners. Their expertise must guide any serious effort to reimagine how care is delivered and funded through listening, collaboration, and a shared goal of building a system that is affordable, accessible, and sustainable for all Minnesotans.
Blaming the current administration, the previous one, or the one before that will not get us any closer to building a sustainable system. Minnesota has long been a leader in healthcare innovation, but leadership requires balance. We need transparency in how public programs are funded, accountability for cost growth, and a renewed focus on affordability for working families. That includes cutting administrative waste, ensuring fair reimbursement for providers, and exploring market-based reforms that promote competition and choice.
Healthcare is not just a policy issue; it is a kitchen table issue. Unless we work together and act now, more Minnesotans will find themselves priced out of the coverage they depend on.
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