The Minnesota Senate approved a Republican plan Wednesday night to stabilize the individual health insurance market through a new state subsidy.
Senators passed the $600 million reinsurance bill by a 37-29 vote, with no guarantee that it will lower costs.
Supporters are hoping the creation of state-operated reinsurance program can head off another big spike in individual market premiums for 2018. It would cushion insurance companies from expensive payouts. Once medical expenses reach $45,000, state money would begin covering 80 percent of the costs up to a cap of $250,000.
Sen. Gary Dahms, R-Redwood Falls, said his bill could result in premium reductions next year of 18 to 23 percent. But Dahms added that there's a possibility that the rates could still go up.
"I'm going to make sure that I'm not going to stand here and say we can guarantee this. There are no guarantees in this business."
Lawmakers want a reinsurance bill enacted soon, before insurers begin calculating their 2018 plans and premiums.
Sen. Michelle Benson, R-Ham Lake, said a fix was needed rapidly and there is no straightforward path to follow.
"We are in unprecedented change, and we are doing our very best to make good choices, moving as quickly as we need to impact the market for 2018."
The Senate bill would take $360 million over the next two years from the Health Care Access Fund and $240 million from the budget reserve. Lawmakers are counting on a potential federal waiver and reimbursement to offset some of the state cost.
Three Democrats joined Republicans in passing the bill. The rest of them opposed it.
Sen. Jeff Hayden, DFL- Minneapolis, spoke against the bill and its funding sources.
"We want to take the money out of the reserves and risk our future, rob our piggy bank, potentially risk our bonding rating to do this work. Members, we have a $1.65 billion surplus. If this is what we want to do, why don't we take the money from there?"
DFL opponents also complained that the subsidy would provide no guarantee of savings. They tried unsuccessfully to amend the bill with a pared down version of DFL Gov. Mark Dayton's proposal for an expanded public health care option. That failed on a tie vote.
Sen. Erik Simonson, DFL-Duluth, said his constituents remain concerned about access and affordability.
"They say 'it doesn't matter. What good does it do to reduce the premium if I can't afford the co-pay and the deductible.' They still have that problem facing them. This bill doesn't fix that. It is still going to be unaffordable health care."
Several Republicans went out of their way to blame Democrats, both in Minnesota and Washington, for the current health insurance issues.
Sen. Mary Kiffmeyer, R-Big Lake, said it was their embrace of the Affordable Care Act that caused the problems that the bill is trying to fix.
"This disaster didn't just magically happen and there was a situation beyond our control. It was a control. It was a decision. It was a conscious decision that I and many others absolutely opposed as fundamentally and fatally flawed." Dayton has said that he is open to a "reasonable" reinsurance plan. But only if it promises to deliver savings and doesn't use any general fund money.
The CEOs of five Minnesota health plans sent a letter to Dayton and top legislative leaders endorsing reinsurance legislation, calling it a "critical step for stabilizing the market for 2018." But they stopped well short of making any promises about premium costs.
The House passed a reinsurance bill that kicks in the state subsidy at a slightly higher cost level and uses funding sources that don't include the budget reserve. Now the House, Senate and governor will try to negotiate a compromise.