A major initiative of the Minnesota Legislature to reduce individual health insurance premiums in 2018 and 2019 became law on midnight Monday, without the signature of the governor. The governor and legislative leaders recognized that major action was needed to stabilize the collapsing individual health insurance market in the state. But Dayton was disappointed with the final product presented to him. He was upset that health plans ignored his request for a commitment to stay in the individual market if they accepted state funds. He was also concerned that there was no guarantee that reinsurance would lower insurance premiums.
The new Minnesota Premium Security Plan will be established with $542 million in state funding. It will provide an 80 percent subsidy for a single individual's claims between $50,000 and $250,000 after which the plans would accept total risk. The Premium Security Plan would be guided by a 13-member board of directors which must include one licensed insurance agent.
Funding for the premium security plan will come from both the health care access fund ($400 million) and the state general fund ($142 million). The Governor objected to using the money from the health care access fund which he had recommended be expended on making the MinnesotaCare program a public option in the individual market. This proposal was not accepted by the Republican controlled House and Senate.
To proceed, the reinsurance program must receive federal support without risks of penalty or loss of existing federal ACA funding. Any additional federal funding that might be legislated by Congress for reinsurance or risk pooling would be used to offset state funding. The Commissioner of Commerce will request a "state innovation waiver" to implement the program beginning in 2018.
In addition, last month, the state legislature enacted a $326 million premium relief law for those who purchased individual health insurance in 2017. The state is now prepared to spend $868 million on the 190,000 who buy health insurance in the individual market, a little over $1500 a year per person. Will it help? Let's hope so.
