On Monday, Senate Finance Chair Julie Rosen (R-Fairmont) and the Minnesota 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. 

“It wasn’t all that long ago that Minnesota’s health insurance market was on the brink of collapse,” Rosen said. “A lot of families were in an incredibly difficult position of choosing between paying their premiums or paying for groceries, their mortgage, or their car payment. Reinsurance is what finally brought things back under control. Renewing the program will continue to protect families from those rising costs.”

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. The Senate’s 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.