Senator Koran, Senate, Pass Successful Reinsurance Program, Protecting Minnesota Families from Rising Health Care Costs

On Thursday, Senate Republicans 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 faced an April 1 deadline to meet a federal requirement to continue the program. Senate Republicans initially passed reinsurance with funding for five years, with no significant policy changes. House Democrats had passed a reinsurance bill that contained no funding and significant policy changes.  

“Senate Republicans worked incredibly hard to establish reinsurance in 2017, after the Affordable Care Act destabilized Minnesota’s individual health insurance market,” Senator Mark Koran (R-North Branch) said. “Since then, reinsurance has prevented double-digit rate increases, lowered costs for our healthcare consumers, and kept provider options open. I am proud that we secured a three-year extension today to protect Minnesotans from further increases in their care cost.”

The bill provides three years of funding at the 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 it 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 whole plan year.  

In 2016 insurance premiums for the individual market increased by double digits, as high as 49%, due to changes caused by the Affordable Care Act. Additionally, some counties had just one health care insurance plan. Senate Republicans acted in 2017 to lower premiums and increase competition among providers 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 highly effective at lowering costs for consumers. Over the first three years after implementing the program, premiums decreased by 25.5 percent in Minnesota 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.