Medical payments per workers' compensation claim held steady in Minnesota in 2025, following two years of increases, according to the Workers Compensation Research Institute (WCRI).
“Minnesota is unusual among the study states in that medical costs per claim remained stable in 2025,” said Sebastian Negrusa, WCRI’s vice president of research. He said changes to the state fee schedule were part of the reason, along with a number of other factors.
The findings are in CompScope Medical Benchmarks for Minnesota, 2026 Edition, which compares medical payments, prices and use of services with 26 other states, using data through 2025. The study tracks the effect of regulatory changes, including updates to Minnesota’s hospital outpatient fee schedule since October 2023. It also looks at how shifts in the mix of claims, inflation and new medical treatments have affected payments.
The stable medical costs come against a background of falling workers’ comp costs in Minnesota. According to the Minnesota Department of Labor and Industry, the state’s average pure premium rate for 2026 is 44% lower than in 2004, and 34% lower than in 2016.
For 2026, the Minnesota Workers’ Compensation Insurers Association (MWCIA) indicated an overall 4.6% decrease in pure premium base rates, according to the state’s Workers’ Compensation Advisory Council. The MWCIA also reported that indemnity severity in Minnesota rose 24% over the past five years.
Rates for employers in the state’s residual market are falling too. The MWCIA said the average premium level for the Minnesota Workers’ Compensation Assigned Risk Plan, including surcharges, will fall 3.8% for policies effective January 1, 2027.
For brokers placing workers’ comp in Minnesota, stable medical costs support continued rate softening into 2027 renewals. Minnesota is an open-rating state, so insurers set their own rates using MWCIA’s advisory pure premiums as a starting point. Flat medical costs give carriers room to stay competitive on price.
The rise in indemnity severity is the counterweight. With wage-replacement costs per claim climbing while medical costs level off, the overall cost picture depends increasingly on indemnity. Brokers should expect carriers to focus more on return-to-work programs and claim duration when pricing accounts, particularly for employers with longer-tail claims.
WCRI noted that Minnesota is unusual. In many of the other study states, medical costs per claim kept rising in 2025, so multistate employers may see a sharper difference between their Minnesota costs and those elsewhere.
