The Minnesota Senate on Monday approved legislation to extend Minnesota’s successful reinsurance program for another year. The program has played an integral role in stabilizing insurance rates on the individual market without any additional cost to the taxpayers.
“Reinsurance saved thousands of families who were caught in an endless cycle of double-digit insurance premium hikes,” said Sen. Carla Nelson (R-Rochester). “Minnesota has long been a health care leader and reinsurance is another example of a program that received national plaudits for its success. Continuing to fund reinsurance is one of the most basic things we can do to make sure families have access to affordable coverage.”
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.
Governor Tim Walz did not reauthorize funding for the program in his initial budget proposal. Failing to continue the program could destabilize the individual health insurance market, cause drastic increases in premium costs, and jeopardize approximately $90 million in federal money.
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. The reform, which was first implemented in 2017, has been lauded by both local media and national news outlets and used as a model by a number of other states.