Minn. Legislature passes bill to extend reinsurance program

Senators Jeremy Miller and Gary Dahms
Sens. Jeremy Miller, R-Winona, and Gary Dahms, R-Redwood Falls, briefed reporters Thursday on a deal reached on reinsurance, which prevents premiums from spiking in the individual health insurance market.
Brian Bakst | MPR News

Updated: 7:49 p.m.

Minnesota lawmakers passed legislation Thursday to extend a program that helps head off rate shocks for people in the individual health insurance market amid grumbling from some that it only papers over problems in obtaining affordable coverage.

The $700 million agreement adds three more years — with an extra two authorized but not funded — to what’s called a reinsurance program. That’s when the state absorbs a portion of the most expensive claims to keep health plans from dramatically raising premiums to cover costs.

Minnesota has until Friday to ask the federal government for a waiver so there was some urgency for the Legislature. 

Senate Majority Leader Jeremy Miller, R-Winona, said the duration of the deal was important for Republicans.

“It helps provide stability, which is incredibly important for Minnesotans who rely on that individual market for their health insurance needs. And it also ensures access for those Minnesotans,” Miller said. “So having a three-year plan with funding, I think is a really, really good outcome for the people of Minnesota.”

Without it, some of the 167,000 people who buy through the private market could face significant, double-digit premium spikes when they shop for 2023 plans in the fall.

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House Commerce Committee Chair Zack Stephenson, DFL-Coon Rapids, said the effects vary but the additional cost without reinsurance ranges from $500 to $4,600. 

“We need to make sure that they don't suffer catastrophic premium increases this fall,” Stephenson said, adding, “This is a very significant savings to Minnesotans that this program creates and is, for many people, the difference between affordable health care and unaffordable health care.”

The deal includes some policy changes that would allow people to spread out their co-pays and access more post-natal care coverage.

But some key DFLers said they weren’t on board with the plan negotiated by their leadership, Senate Republicans and DFL Gov. Tim Walz’s administration. 

House Health Finance and Policy Committee Chair Tina Liebling, DFL-Rochester, said the reinsurance program first enacted by a 2017 law has gone on too long to the benefit of insurers.

“Many of my Democratic colleagues in the House consider reinsurance to basically be a bridge to nowhere,” she said. “And we keep extending the bridge and it’s still a bridge to nowhere.”

She supports a plan for a public insurance buy-in option for people who can now only shop for private plans on the individual market. Most people get health coverage through an employer or public program now.

Senate Commerce Committee Chair Gary Dahms, R-Redwood Falls, said the reinsurance program is here for the foreseeable future.

“Until we find something that works better, this is probably what the answer is going to be,” Dahms said. “At this point in time. This is what we find is working the best, it's the most stable, and provides probably the best option for the folks who want to be in the individual market.”