Today with bipartisan support, the Minnesota senate passed legislation to extend Minnesota’s successful reinsurance program for another year. Extending the program ensures insurance rates in the individual market will remain stable, and without any additional cost to the taxpayers.
Minnesota Republicans helped lead the way with current reinsurance program. The original $542 million for operations was offset by federal funding and the federal dollars will continue through 2022 with this extension. Reinsurance has been proven so effective at addressing both access to health care and the cost of health care, it is now being implemented in several other states across the nation.
“This is a good program that has years of success to back it up,” said Senator Jeff Howe (R-Rockville). “In 2016, our insurance market was unstable, and we introduced this reinsurance program to give us time to find a more permanent solution. It stabilized the market, brought in choice for consumers, and made insurance more affordable for small businesses and families. This program has continuously given Minnesotans the best rates in the country and helped hold down premium increases. Without this program, those with individual insurance policies can expect a 20% – 30% premium increase, and in the middle of a pandemic, Minnesotans simply can’t afford those increases right now.”
In 2016 insurance premiums for the individual market increased by double digits, as high as 49%, due to changes from the Affordable Care Act. Furthermore, many counties only had one insurance company to choose from. Minnesota continues to enjoy some of the lowest rates in the country, every county has at least two providers, and a new provider has started offering plans in the state.
Without legislation, the successful Reinsurance Program was at risk of not being funded for its fifth year. If left unfunded, the state risks destabilizing the individual health insurance market, drastic increases in premium costs, and could lose approximately $90 million in federal money if the program expires.