On Tuesday, March 11, the Senate Health and Human Services Committee heard legislation authored by Senator Gary Dahms (R – Redwood Falls) to extend Minnesota’s reinsurance program. Senate File 333 seeks to maintain the program’s success in stabilizing the individual insurance market and lowering premiums for consumers. The bill was previously passed by the Senate Commerce and Consumer Protection Committee with bipartisan support.

This legislation would allocate $512 million from the state’s general fund to the Premium Security Plan account in fiscal year 2026. This one-time appropriation would ensure continued oversight and reporting to maintain the program’s effectiveness.

“Reinsurance has delivered real results by reducing health insurance costs for Minnesota’s consumers,” Senator Dahms said. “This program is crucial to keeping health care affordable, stabilizing the individual insurance market, and ensuring Minnesotans have access to the quality care they need.”

In contrast, Governor Tim Walz recently proposed increasing the Insurance Premium Tax by adding an assessment to cover the funding gap between what insurance companies pay and what the federal government provides for Minnesota’s reinsurance program.

Senator Dahms warned that higher taxes on insurers would ultimately raise costs for Minnesota families. “Governor Walz’s tax increase will drive up premiums, burden consumers, and make healthcare less affordable at a time when Minnesota families are already struggling with rising costs,” Senator Dahms said.

Minnesotans already pay a 1.8% tax on healthcare services to subsidize affordable healthcare options, and insurance companies face an 8.86% tax. Unlike other states that use similar tax assessments, Minnesota has many non-profit insurance providers that would be significantly impacted by these additional financial burdens.

Senate File 333 was laid over for possible inclusion in the Omnibus Health and Human Services bill.