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. 

“Our innovative reinsurance program has been a huge win for small businesses, farmers, and families who buy health insurance through the individual market,” Senator Torrey Westrom said. “In 2017, because of Obamacare,  Minnesotans saw skyrocketing health insurance premiums and a collapse of the private health care insurance market across rural Minnesota. This led the legislature to pass the reinsurance program to help stabilize premiums and create greater choice for Minnesotans. It is imperative we extend reinsurance for another five years to avoid a massive increase in premiums and avert another potential health care insurance market collapse.” 

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.  

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. 

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.  

The bill now awaits action by the House of Representatives.