Health insurance proposal on Mark Dayton’s desk. Will he sign despite ‘serious concerns’?

March 31--The fate of a measure to try to stabilize Minnesota's individual health insurance market now lies in Gov. Mark Dayton's hands.

The "reinsurance" package, which would spend $542 million over the next two years to absorb high medical costs in the state's individual insurance market, passed the House and Senate on Thursday. The votes were largely along party lines, with just one Democrat in each chamber voting yes.

Dayton hasn't signaled how he'll act on the measure. In January, he agreed to the idea of a reinsurance bill -- but he has criticized how legislative Republicans drafted their idea. His staff helped lawmakers get the bill in shape and add provisions Dayton wanted -- but on Wednesday he wrote them a letter saying he still has "serious concerns about this legislation."

A Dayton spokesperson on Thursday said the governor "is reviewing the bill over the weekend with his commissioners and staff."

Dayton "will make an announcement on Monday regarding his plans for the bill," Dayton press secretary Sam Fettig said.

Monday is April 3, two days after the April 1 deadline by which the state's HMOs have long said they needed to know whether reinsurance would be in place in order to account for it in setting 2018 premiums. Fettig said there's "no substantive difference" between the two dates in terms of notifying the health plans, adding that Dayton and his staff will "take the weekend" to review the measure.

Commerce Commissioner Mike Rothman predicts that by spending $271 million per year, reinsurance would lead to premiums in the next two years that are 20 percent lower than they would be without insurance. This affects only the individual health insurance market, which covers roughly 4 percent of Minnesotans without employer-sponsored insurance or a government health program.

Democrats criticized the cost in taxpayer funds and the very idea of giving money to help insurance companies.

"It is absolutely a subsidy to the insurance companies with no pass-through guaranteed," said Rep. Tina Liebling, DFL-Rochester.

Republicans said it was a short-term measure necessary to prevent a total collapse of the insurance market on which roughly 190,000 Minnesotans depend.

"This bill needs to pass today because it's the second step," said Sen. Scott Jensen, R-Chaska. "It's going to provide the opportunity to calm the waters. Right now we're in a bit of a death spiral."

Even if Dayton lets reinsurance become law, there's no guarantee that the reinsurance program will become law. The measure is dependent on getting approval from the federal government as a way to prevent the plan from costing the state hundreds of millions of dollars in federal subsidies.

This article has been updated with Dayton's new timeframe for action on the reinsurance bill.

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