Dayton kicks off session with insurance rebate proposal

Jan. 03--ST. PAUL -- Gov. Mark Dayton is calling on lawmakers to pass his insurance rebate proposal this week.

Dayton reintroduced his solution to tackle rising individual market insurance costs Tuesday morning, the first day of the 2017 legislative session. He urged legislators to approve the "time-urgent" bill before the weekend to ensure affected residents can get a 25 percent rebate on their insurance costs in March while those still purchasing insurance before the Jan. 31 enrollment cutoff can factor the rebate into their plans.

"Minnesotans are still making decisions about what level of health care coverage they can afford," Dayton said.

It remains to be seen whether House and Senate Republicans agree to pass the bill, however. Dayton and House Speaker Kurt Daudt, R-Crown, failed to come to an agreement to pass the proposal in a special session last month, and Daudt called his relationship with Dayton "damaged" just two weeks ago.

Both Dayton and Daudt played down concerns over how well they would work together Tuesday. Daudt said it was unlikely any insurance relief would pass this week as bills won't be introduced until Thursday. Yet he vowed the House would pass short-term relief by Jan. 12.

Yet he stopped short of addressing the governor's bill or whether Republicans would support Dayton's proposal. Daudt said the bill's contents could remain flexible as the House GOP discusses terms with Dayton and the Senate. Yet Daudt also expects lawmakers to pass some sort of short-term reform, even if they can't agree on long-term solutions.

"We have to find agreement on long-term reforms, but it is a triage issue," he said. "We're going to have to do the short-term now."

Daudt also warned Dayton "absolutely must" agree to sign off on long-term reforms, "or we're going to be back in the same position a year from now, and we can't have that."

Dayton's proposal would take about $313 million from previously scheduled reserve funds to pay insurance providers, who would directly offer rebates to customers. Some lawmakers have called for state officials to use money from a health care access fund instead, which Dayton said Tuesday he would be willing to approve. The rebates will only happen in 2017.

Yet some Republicans say they could pass a rebate proposal, provided Dayton further outlines safeguards to ensure state funding isn't misused.

Sen. Julie Rosen, R-Vernon Center, agrees with Dayton on using money from budget reserves rather than health care funding given, but she also hopes Dayton and other state officials better outline how funding will be used. Rosen said she was concern most of the money would go to major providers rather than smaller insurance companies that cover residents in her district.

"We need to have some accountability and safeguards in that proposal," she said. "It's a tremendous amount of money."

Dayton's proposal could be affected by bad blood among state leaders over failed special session negotiations last year. The governor and GOP leaders spent the last seven months or so discussing a potential special session for tax and public works bonding bills, and a solution to skyrocketing 2017 insurance premium increases announced by insurance providers at the end of September.

Dayton and legislative leaders were close to an agreement at the beginning of December, but the deal fell apart amid accusations from both sides of trying to add too many additional measures to the special session. The GOP also wanted to see additional health care reforms passed during a special session, but DFL lawmakers said any reforms needed to be properly vetted by policy experts and nonpartisan staff during session.

Those increases affect Minnesotans who buy individual insurance coverage rather than receive insurance through their employers. About 125,000 people who don't qualify for state subsidies will see an average of 50 to 67 percent insurance rate increases this year.

DFL lawmakers are already putting pressure on the Republican-controlled House and Senate to pass Dayton's proposal. Rep. Tina Liebling, DFL-Rochester, accused the GOP of sinking Dayton's proposal during special session negotiations without offering insurance relief proposals of their own.

"They simply engaged in magical thinking," she said. "That's something we've seen before and I hope we don't see it again, but I'm afraid we will. The solution for the GOP is to say, 'Somebody else figure out the problem.'"

Liebling is sponsoring Dayton's proposal in the House, while Sen. Tony Lourey, DFL-Kerrick, takes it up in the Senate.

Changing care

Dayton's proposal is just the first of several expected bills aimed at reforming health care costs in Minnesota. Republicans are expected to introduce a reform package that includes a potential six-month rebate, creates a continuity of care plan so residents with severe issues can keep their insurance for 120 days if increased costs are forcing them to switch coverage, and allows more insurance companies previously held back by a temporary freeze to offer their product in the individual market in 2018.

Yet both parties acknowledge it could be difficult to tackle health care reform without knowing how a Republican-controlled Congress and President-elect Donald Trump will change the nation's health care laws.

Trump took aim at the Affordable Care Act on Twitter Tuesday morning, quoting Dayton's oft-repeated stance that "the Affordable Care Act is no longer affordable." Republicans have vowed to repeal and replace the ACA, also known as Obamacare, but it could take years before major changes are implemented.

"It's an issue that adds a level of complexity," Daudt said.

State officials say more than 57,000 people have signed up for insurance coverage through MNSure during its current enrollment period. About 60 percent of those qualify for state subsidies. In addition, about 19,000 of those qualified for MinnesotaCare.

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