Today, the Senate passed legislation to extend Minnesota’s successful reinsurance program for another five years. Extending the program ensures insurance rates in the individual market will remain stable for Minnesota families. 

“We must act now to fully fund our individual health insurance markets,” said Chief Author Senator Gary Dahms (R-Redwood Falls). “Minnesota families, farmers, and small business owners cannot afford a drastic increase in their premiums. Reinsurance has proven to work and there is no reason to not extend this successful program.”    

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.  

“Minnesota families are seeing rising costs and inflation devastating their budgets,” said Co-Author Senator Michelle Benson (R-Ham Lake). “Minnesota families are already struggling and cannot afford skyrocketing health care premiums because we failed to act. Protecting our individual health insurance market and continuing our successful reinsurance program is a must.”  

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. 

“Minnesota’s insurance market was extremely volatile in 2016, and we managed to fix the problem by instituting a reinsurance program that led to decreases in insurance premiums across the state. This is a positive program with proven results—in a time of rising costs and inflation, we must maintain affordable health care for Minnesotans,” said Health & Human Services Chair Senator Paul Utke (R-Park Rapids).   

Last year the program faced a cut due to opposition from Governor Walz. The costs picked up by the program were reduced from 80% to 60% which led to the largest annual increase in premiums since the program’s inception. Senator Dahms’ bill would return the coinsurance level to 80% which will save the average enrollee $130 per month compared to $100 at the 60% level. Without the program, the Center of Medicaid Studies suggests premiums could rise as much as 36% in the individual marketplace in 2023. According to the Department of Commerce, it is estimated 15,000 Minnesotans will lose health insurance without the program. 

“We must act now to save Minnesotans from rising health care costs,” Dahms said. “Let’s skip the political games and get this five-year extension done now.”  

Watch Senator Dahms speak on reinsurance here. 

The bill now awaits action by the House of Representatives.