Senate Republicans continued work to Advance Minnesota’s health care system with the second major reform bill in three months. In January, the new majority showed its commitment to health care reform when it passed the Emergency Aid and Access Act, which is set to deliver immediate premium relief to individuals who have experienced premium hikes since our state’s fill embrace of Obamacare.

This second bill – the Minnesota Premium Security Plan – will stabilize the individual market by creating a new reinsurance program estimated to lower expected premiums by roughly 20% in 2018. The program is designed to absorb the costs of covering high-risk consumers, which helps to lower premiums for the rest of the market.

The Minnesota Premium Security Plan works like this:

• Insurers pay 100% of an individual’s benefit costs up to $45,000 per year.
• Once an individual’s benefit costs reach $45,000, the state steps in and pays 80% of further costs up to $250,000. The insurer continues paying 20% of these costs.
• If the individual’s benefit costs exceed the reinsurance cap of $250,000, the subsidy drops off and the insurer pays the 100% of the remaining costs.

“The premium relief package passed at the beginning of session is a temporary fix, but our state desperately needs long-term reforms that will make in impact on next year’s rates,” said Sen. Mark Koran (R-North Branch). “The Premium Security Plan passed today will spur greater access and coverage to affordable health care, while creating more competition and lowering overall insurance costs. Though health care reform is an ongoing process, incremental changes like the two we have passed so far make a significant impact for thousands of Minnesotans.”

Senate File 720 passed off the Senate Floor and will be proposed to the Governor by the end of session.