The reinsurance program for the individual health insurance market is set to expire at the end of 2021 and MIIAB, as a defender of the private health insurance market, is working to renew the program for the next two years. And we need your help!
You may recall that the Minnesota Legislature passed reinsurance as part of the Minnesotan Premium Security Plan in 2017 to address spiking health care costs. The reinsurance program plays a critical role in stabilizing the individual insurance market and lowering premiums for the approximately 150,000 Minnesotans who get their insurance from the individual market. It does this by investing state and federal funds to help offset health plans’ high claims costs and the adverse selection that occurs in the individual market. And it works! According to the Minnesota Department of Commerce, the reinsurance program lowers premiums 20% on average and saves Minnesotans in the individual market millions of dollars each year.
The legislation renewing the reinsurance program (SF 694, which is sponsored by the Senate Commerce Chair and former agent Gary Dahms) will be up for a vote on the Senate Floor as early as Monday, March 1. We are encouraging you to reach out to your State Senator to support the passage of SF 694 for the following reasons:
- If the reinsurance program isn't extended, premiums could increase more than 25%, according to a recent actuarial analysis.
- Without the stabilizing impact of reinsurance, it will be difficult for carriers to remain in the individual market. Minnesotans, such as farmers and free-lancers, who rely on the individual market will not only face rising premiums, but also fewer options. No one knows better than independent agents how challenging the health insurance market was before the reinsurance program.
- Reinsurance is pass through funding and not a penny goes to the health plans until a qualifying claim is paid. No funding goes to the health plans bottom line.
- No new funding is necessary to renew reinsurance.
- The Legislature must act quickly, so health plans can take reinsurance into account when calculating 2022 rates.
Thank you,
Robyn Rowen
MIIAB Lobbyist
