Minn. Senate Republicans: State Sen. Rosen, Senate Pass 3-Year Extension of Successful Reinsurance Program

ST. PAUL, Minnesota, April 2 -- Minnesota Senate Republicans issued the following news:

Senate Finance Chairwoman Julie Rosen (R-Fairmont) and Senate Republicans today passed a three-year extension of the successful Minnesota Premium Security Plan, known as "reinsurance" around the Capitol. Reinsurance lowers the cost of the individual market health insurance plans by covering some of the more expensive care costs for people in the individual market. Legislators were facing an April 1 deadline to meet a federal requirement in order to continue the program. Senate Republicans originally passed reinsurance with funding for five years, with no significant policy changes. House Democrats had passed a reinsurance bill with no funding, and significant policy changes.

"It wasn't all that long ago that Minnesota's health insurance market was on the brink of collapse," Rosen said. "A lot of families were in an incredibly difficult position of choosing between paying their premiums or paying for groceries, their mortgage, or their car payment. Reinsurance is what finally brought things back under control. Renewing the program will continue to protect families from those rising costs."

The agreement provides three years of funding for reinsurance at a cost of $890 million. This is the longest extension the legislature has agreed upon and provides the most stability for the market. Record inflation hitting consumers at the grocery store, gas pump, and on services hasn't hit the health care market yet, but could be seen as Medicare releases its rates for 2023 in the coming months. The Conference Committee also agreed to a few policy changes that require postnatal care coverage and flat fees for prescription drugs that allow the consumer to spread their deductible out over the full plan year.

In 2016 insurance premiums for the individual market increased by double digits, as high as 49%, due to changes from the Affordable Care Act. Additionally, some counties had just one health care insurance plan available to them. Senate Republicans acted in 2017 to lower premiums and increase competition among providers by passing Minnesota's reinsurance program. Following reinsurance implementation, costs stabilized and every county in Minnesota has at least two health care plan options to choose from.

Over time, the reinsurance program has proven to be extremely effective at lowering costs for consumers. Over the first three years after the implementation of the program, premiums decreased by 25.5 percent in Minnesota as compared with an increase of 25.9 percent for the United States overall. The program has led to Minnesota enjoying some of the lowest health insurance rates in the country. Additionally, reinsurance has proven so successful that several other states have created programs since 2017