On Monday, the Senate passed bipartisan 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. 

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 it is being implemented in several other states across the nation.  

“Reinsurance has worked, plain and simple,” Senator Mark Koran (R-North Branch) said. “Over the past four years, the program has stabilized the market and resulted in an amazing turnaround on costs. As a result of the reform, individual health insurance rates have held or dropped year over year. While we still must strive for better long-term health care solutions, the stability provided by this program has resulted in huge savings for countless Minnesota families and saved them from the difficult choice of cutting basic living expenses or affording their care.”

In 2016 insurance premiums for the individual market increased by double digits, as high as 49%, due to the Affordable Care Act’s changes. 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. 

Governor Walz, in his proposed budget, did not include reauthorizing the state’s successful reinsurance program. 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.