Dayton demands answers from health insurers

Updated at 4:30 p.m. with insurance industry response

Gov. Mark Dayton set conditions Wednesday for gaining his signature on a bill intended to shield insurance companies from costly medical claims, saying it won't become law without promises from the firms that would benefit.

Dayton's comments and a letter elaborating on them were delivered as legislative negotiators work toward a reinsurance deal, which lawmakers are pushing to pass by March 31. It would have the state pay a share of patient costs once claims reach a certain level.

The plans being discussed would cost about $300 million a year. Dayton said health insurers owe the public some answers in exchange.

"We have a right to know -- Legislature, taxpayers -- how this money is going to be used. Is it going to achieve the intended purpose of keeping them in the individual market next year? And are they going to keep rates from rising further?"

Jim Schowalter of the Minnesota Council of Health Plans, a voice for the nonprofit companies that provide insurance here,  said executives at companies selling individual policies hope to maintain offerings for 2018. And he said they will strive to keep rates low, but that depends on what a reinsurance plan looks like.

"Insurers don't get their money from the Federal Reserve, they get it from premiums," Schowalter said. "So if some of these very expensive bills are shared by all of us that means the premiums for the people buying that insurance don't have to be as high."

But Schowalter said there are too many moving parts in the health debates in Minnesota and Washington to provide guarantees.

The DFL governor also urged Republican lawmakers to raise money from an industry tax rather than tap into budget reserves, another health fund or the general treasury to pay for the reinsurance plan. It's possible the state could qualify for federal grants to offset some costs depending on how the bill is structured and if a waiver is granted.

Schowalter said an assessment on health companies would be counterproductive because they would likely pass costs onto consumers, defeating the goal of using reinsurance to tamp down rates.

Dayton wrote to members of the House-Senate conference committee with his stance on the reinsurance effort.

Dayton also pleaded with lawmakers to give his plan to create a MinnesotaCare buy-in option another look as part of their deliberations. But he said its inclusion wouldn't be a requirement for his approval.

The urgency to pass a bill before April is meant to influence the rate-setting process by insurance companies that expect to sell individual policies during 2018 open enrollment this fall. Those proposed rates must be submitted by May to state regulators.

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