Dayton: I won’t block health insurer relief package

Updated 12:25 p.m. | Posted 10:59 a.m.

Gov. Mark Dayton said Monday he won't stand in the way of a $542 million health insurance relief plan.

In a letter to lawmakers, Dayton said would let the reinsurance bill become law without his signature. It's a step he has seldom taken in his six-plus years in office.

Reinsurance provides backup funding to health insurance companies when they're hit by large claims. Minnesota's major health insurance companies said Monday their combined 2016 operating losses totaled $687 million.

The DFL governor says he wanted more promises from health insurance companies that the money wouldn't just go to their bottom lines, but rather would be used to buy down premiums and expand coverage options. He didn't get those guarantees but said the need to shore up the individual insurance market led to his decision.

Republicans who largely crafted the law passed it with few Democratic votes. DFL lawmakers have criticized the legislation as an industry bailout on the backs of taxpayers.

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The governor said the terms of the deal bother him, but he acknowledged it makes a collapse of the individual insurance market less likely.

"Without this legislation, we give the insurance companies the pretext to pull out of the individual market entirely as Blue Cross Blue Shield did last year, which upset the whole individual market severely," he told reporters Monday.

The state has no recourse to block payouts from the fund if insurers pull back coverage or raise their rates considerably, he added.

No companies responded formally to a letter Dayton sent a couple of weeks ago seeking rate and coverage assurances.

Dayton said he was upset that his proposal to make MinnesotaCare available to other people who pay premiums wasn't part of the bill. He said insurance companies succeeded in fencing out rivals.

“It’s a good deal for them: They get the bailout and they keep competition away, which would challenge the rates they do charge,” he said. “And they were very influential with the Republicans in the House and Senate. They got their way. We’ll see what they do as a result of it."

Republican House Speaker Kurt Daudt, R-Zimmerman, said he’s pleased a reinsurance bill is becoming law but disappointed that Dayton didn't sign it.

Daudt accused Dayton of trying to wash his hands of a problem he helped create.

“The individual market place has basically collapsed," he said. "It’s going to take more than a year for us to get out of this. It took us about four years to get here. It will take us two or three years to get out of here. This is a great first or second step, but there are a lot of steps that need to come beyond this.”