State reinsurance program extended

STATEWIDE — The Minnesota Department of Commerce's application to extend the state's reinsurance program under the Affordable Care Act has been approved for another five years by the U.S. Departments of Health & Human Services and Treasury. The reinsurance program, or Minnesota's Premium Security Plan, reduces premiums and increases the affordability of health insurance for people who buy insurance on their own. The application extends Minnesota's State Innovation Waiver, referred to as a "Section 1332 Waiver," for Plan Years 2023 to 2027.

In the application to the federal agencies, the Minnesota Department of Commerce showed that the reinsurance program has met the goal of achieving a 15-20 percent average statewide reduction in premiums from what they would have been without the program each year from 2018-2022.

Minnesota Gov. Tim Walz led 2022 negotiations to extend the reinsurance program on a bipartisan basis. Gov. Walz signed the bill into law on April 1. Commerce submitted the state's revised waiver extension application to the federal agencies on May 12.

Minnesota's reinsurance program was initially created by the Minnesota Legislature in 2017 to help stabilize high health insurance premiums in the individual insurance market. That market has since stabilized. In 2022, every county in Minnesota has at least two insurers offering individual market plans with the majority (all but seven counties) having three or more insurers, which offered 22 separate health insurance plan options.

"Reinsurance has been an important tool for the State of Minnesota to help keep health insurance accessible for Minnesota consumers who buy their own insurance," said Commerce Commissioner Grace Arnold. "Going forward, our goal is to make progress on making health coverage more affordable through innovations and health system reforms."

The individual health plan market is for people who are not insured through employer based coverage and are not eligible for Medicare or Medicaid. In 2022, about 3 percent of Minnesotans (approximately 163,000 people) have individual health insurance plans, with the majority purchasing health plans offered through MNsure, the Minnesota based health insurance marketplace established under the Affordable Care Act.

The reinsurance program provides health plans with state-funded reimbursement for claims between $50,000 to $250,000 for high-cost health care. Some examples of high-cost care are treatments for cancer, intensive care for babies born prematurely, or for COVID-19 hospitalizations.