Senate Majority Leader Jeremy Miller (R-Winona) and Senate Republicans today passed a three-year extension of the successful Minnesota Premium Security Plan, known as “reinsurance” around the Capitol. Reinsurance lowers the cost of the individual market health insurance plans by covering some of the more expensive care costs for people in the individual market. Legislators were facing an April 1 deadline to meet a federal requirement in order to continue the program. Senate Republicans originally passed reinsurance with funding for five years, with no significant policy changes. House Democrats had passed a reinsurance bill with no funding, and significant policy changes.
“I’m very proud of the legislators from the Senate and the House that contributed to this process, bringing in their expertise and experience to write this bill. While we had significant differences at the beginning, we worked together to find compromise and deliver for Minnesotans,” said Senate Majority Leader Jeremy Miller (R- Winona). “Passing this as a stand-alone bill today is an important improvement to past practices of large supplemental omnibus bills that tie many issues together. Extending reinsurance keeps health care costs low, improves access, and stabilizes the insurance market.”
The agreement provides three years of funding for reinsurance at a cost of $890 million. This is the longest extension the legislature has agreed upon and provides the most stability for the market. Record inflation hitting consumers at the grocery store, gas pump, and on services hasn’t hit the health care market yet, but could be seen as Medicare releases its rates for 2023 in the coming months. The Conference Committee also agreed to a few policy changes that require postnatal care coverage and flat fees for prescription drugs that allow the consumer to spread their deductible out over the full plan year.
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. Over time, 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.