ST. PAUL – The Minnesota House of Representatives has taken another step towards addressing rising health insurance premium costs by approving legislation that could reduce individual health insurance premiums by 18 percent or more. State Representative Paul Torkelson (R-Hanska) supported the Minnesota Premium Security Plan, which addresses reinsurance.
“The Affordable Care Act forced insurance companies to accept patients with pre-existing conditions,” Torkelson said. “When that began to significantly increase their coverage costs, they passed those costs back down to everyone else in their patient pool through higher premium rates. With reinsurance, the State will absorb some of that risk and make it possible for some of these insurance companies to lower the health insurance price tag to our customers.”
According to the legislation, the Minnesota Premium Security Plan will be administered by the Minnesota Comprehensive Health Association (MCHA), which for over forty years ran a high risk pool that brought stability to the individual market and ensured the sickest Minnesotans had access to needed coverage. It will be funded using existing revenue sources.
The MCHA board is comprised of members of the public and health plan experts. They will design payment parameters to mitigate risk, stabilize or reduce premium rates, increase participation, and account for federal funding available for the plan.
Parameters will be submitted to the Department of Commerce for approval. The board will also have the authority to audit eligible health carriers and is required to contract with an independent auditor for an annual reinsurance program audit.
“This bill could allow companies to offer reduced premiums by 18 percent or more to the customer,” Torkelson said. “In the past few years premiums have shot up so dramatically that many customers can’t afford them. This will hopefully lower rates and keep the individual marketplace available to those who need this insurance.”