On Monday with bipartisan support, the Minnesota Senate passed legislation to extend Minnesota’s successful reinsurance program for another year. Extending the program ensures insurance rates in the individual market will remain stable, and without any additional cost to the taxpayers. 

Minnesota Republicans helped lead the way with the current reinsurance program. The original $542 million for operations was offset by federal funding and the federal dollars will continue through 2022 with this extension. Reinsurance has been proven so effective at addressing both access to health care and the cost of health care, it is now being implemented in several other states across the nation.

“We had an extremely volatile insurance market in 2016, and we managed to fix the problem by implementing a reinsurance program that led to a significant decrease in premium rates across the state,” said Senator Eric Pratt (R-Prior Lake). “This program has helped our small businesses and families by giving them options they didn’t previously have. This is a proven program and eliminating it will hurt Minnesotans trying to afford health care during a pandemic.”

In 2016 insurance premiums for the individual market increased by double digits, as high as 49%, due to changes from the Affordable Care Act. Furthermore, many counties only had one insurance company to choose from. Minnesota continues to enjoy some of the lowest rates in the country, every county has at least two providers, and a new provider has started offering plans in the state. 

Governor Walz in his proposed budget did not include reauthorizing the state’s successful reinsurance program. The state risks destabilizing the individual health insurance market, drastic increases in premium costs, and could lose approximately $90 million in federal money if the program expires.