Minnesota Legislature Set To Vote On $542M Reinsurance Deal

March 30--The Minnesota House and Senate are expected to vote Thursday on whether to spend $542 million in state money meant to stabilize the state's individual health insurance market by subsidizing insurance companies' payments on unusually high claims.

The Legislature is expected to easily pass the measure, dubbed "reinsurance." Republican majorities have called it necessary to keep insurers in the individual market and drive down surging premiums.

But it faces an uncertain reception from Gov. Mark Dayton, who has expressed concern about spending state health care money on a plan with no guarantees it will achieve the intended results. The DFL governor and GOP lawmakers must reach an agreement by Friday in order for insurance companies to include the new subsidy in calculating their rates and health plan offerings for 2018.

The measure's backers, who finalized it Wednesday in a House-Senate conference committee, said the next two days are critical for the fate of the state's individual market. Customers there have seen rates soar by more than 50 percent in recent years.

"I really believe if this bill isn't signed by the governor, I don't think we have a market for 2018," said Rep. Greg Davids, R-Preston. "I think it's that serious."

Dayton and DFL lawmakers have expressed support for a reinsurance plan. But they disagree with Republicans on how it should be funded and administered and on what insurance companies should have to agree to in exchange for the state money.

The legislation creates a 13-member panel with members representing both the state and insurance companies. When an individual insurance customer's claims exceed $50,000 -- but are still below $250,000 -- the panel would calculate a payment from the state to the insurance company to help cover the cost. Those payments would amount to between 50 and 80 percent of the total cost of the claim. The state would not help with claims over $250,000.

The state would pay those claims with money from a health insurance tax that funds MinnesotaCare, the state-subsidized health plan for poor residents. Another portion would come from the state general fund. Lawmakers hope federal money will cover some of the overall cost and that they won't see a drop in federal help if premiums go down. The federal government typically gives states less money for health care if they have lower premiums, so the state would apply for a waiver to ensure federal support for Minnesota at the same level.

Dayton successfully pushed GOP legislators to make the entire program contingent on the state receiving the federal waiver.

But in a letter to lawmakers Wednesday, Dayton said he was concerned the bill does not require insurance companies to commit to staying in the individual market or lowering premiums. He and DFL lawmakers urged those additions all along.

The bill is lawmakers' second major effort this year to keep insurance providers in the individual market and drive down premiums. In January, the Legislature approved $326 million in spending on premium rebates for people in the individual market. If the reinsurance plan is approved, it will bring the total spent on stabilizing the individual market to $868 million.

___

(c)2017 the Star Tribune (Minneapolis)

Visit the Star Tribune (Minneapolis) at www.startribune.com

Distributed by Tribune Content Agency, LLC.