This past Tuesday (Feb. 12), legislation to extend the Minnesota Premium Security Plan for an additional three years cleared its first committee. The bill, commonly referred to as “reinsurance,” passed the Senate commerce and consumer protection finance and policy committee with bipartisan support.
“Over the past two years, the Minnesota Premium Security Plan has successfully lowered health insurance premiums for thousands of Minnesotans who purchase insurance on the individual market,” said District 16 Sen. Gary Dahms of Redwood Falls, the author of the legislation. “Extending the reinsurance program will ensure premiums remain stable and the individual health insurance market remains solvent.”
The legislation, Senate File 761, extends the 2017 Minnesota Premium Security Plan for an additional three years, using its initial appropriation and federal funds to continue.
The reinsurance program is a medium-term market stabilization program that uses state dollars to cover a portion of high-cost claims, allowing health plans to better moderate costs and rein in premiums.
The reinsurance program is expected to positively impact all 160,000 Minnesotans who purchase their health insurance on the individual market.
The bill also adds a reporting requirement in an effort to help legislators and the public better understand program operations.
In 2018 and 2019, most Minnesotans purchasing health insurance on the individual market saw double-digit percentage decreases in premium rates over projected rates.
An actuarial analysis has indicated that without a reinsurance program premium rates could go up as much as 50 percent, which is an unsustainable increase that would potentially leave many counties without a single option and cripple the individual market.
“Working in tandem with federal officials, Minnesota’s ‘reinsurance’ program has become an extremely useful tool to stop the steep increases Minnesotans face on their insurance bills,” said Dahms. “It has become a model for states across the country to bring insurance markets back from the brink of collapse. We’re looking to continue bringing the costs of health insurance down for thousands of Minnesotans, and that’s what this bill does.”
– Sen. Dahms of Redwood Falls is in his third term representing District 16 which includes communities in Brown, Lac qui Parle, Lyon, Redwood, Renville and Yellow Medicine counties. He serves as chair of the commerce and consumer protection finance and policy committee and is an assistant majority leader in the Senate.