Senator Scott Newman (R-Hutchinson) 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. 

“Reinsurance reversed years of double-digit health insurance premium increases caused by Obamacare in Minnesota,” Newman said. “Obamacare caused the individual market to nearly collapse, but reinsurance saved it and lowered costs for thousands of families. Renewing it for three more years is a no-brainer.”

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.  

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.