Higher premiums pay for state costs
September 22, 2026–Health insurance rates for 2027 are about to be finalized for Minnesota’s smaller employers and those who purchase their own coverage. Proposed rate increases of 10% or higher have already been submitted.
Our previous post (The Future of Minnesota’s Individual Marketplace) highlights some of the broader reasons rates are going up—namely that the underlying prices of most health care services continue to increase. But another factor is also at play: state policy is shifting some Medicaid costs over to private health insurance.
Home care nursing: for families with complex medical needs
Access to home care nursing is incredibly important. It provides ongoing skilled nursing care for people including children and young adults with complex health conditions. For many families, these services make it possible for a loved one to safely receive care at home rather than in a hospital or other facility.
The policy is cost-effective to the state budget, but not for premium payers who ultimately pay those higher costs. By doing so, the state also forgoes matching federal funds that would otherwise help pay for these services, instead leaving premium payers to shoulder the entire cost. The impact may explain why Minnesota’s policy is unique across the country.
Health insurance plans have helped moderate the cost shift by setting quantity limits on some of the services, which continue to otherwise be covered through Medicaid. These quantity limits have existed in approved regulatory filings for over a decade. To be clear, these limits do not mean coverage for the enrollee could end. It means any additional cost obligations shift back to the state.
However, this issue remains contentious.
In the most recent legislative session, a bill (HF4347/SF4502) sought to remove quantity limits. The Minnesota Council of Health Plans testified in support of keeping these long-standing limits because they have been key to keeping private health insurance plans affordable. Without these limits, the cost shift would be even bigger and premium costs even higher. To make matters worse, private equity firms have been targeting investment in these already high-cost services and dramatically increasing prices.
The issue merits a deep examination of health care access and cost shift implications for premium payers. Thankfully, instead of enacting the bill, a study to explore this issue was passed by the legislature last session. A new study will evaluate any potential fiscal, economic and public health impacts of this issue before any further action is taken. Study findings are due before the next session. This report will coincide with work being done by the Minnesota Department of Health’s Center for Health Care Affordability to recommend policies to support healthcare affordably in Minnesota. Their recently released list of top priorities also includes the impact of government cost-shifting and private equity ownership of healthcare entities.
The issue is not whether home care providers should be fairly compensated for delivering essential services. Rather, policymakers should consider whether coverage mandates unintentionally encourage providers to prioritize commercial reimbursement over public programs that already cover these services. They should also examine the implications for affordability of coverage and program integrity, including whether payment structures provide adequate safeguards against fraud, waste, and abuse while ensuring appropriate coordination between public and private coverage.
The underlying challenge for many Medicaid services is that the state rates are too low. The Council proposed that the state increase its Medicaid rates for this service (as well as others), but that approach has thus far failed to gain support from advocates. Low Medicaid payment rates from the state are an underlying culprit for many issues, not just this one.
Premium payers will unfortunately see substantial increases once rates are finalized at the end of the month. Thankfully, Minnesotans were protected from at least some of the higher due to the legislature deferring action on quantity limits.
With difficult decisions ahead, it will be important for state legislators and the next administration to have all these important details as we work together to support broad access to high-quality care at the most affordable cost.