Bipartisan Reinsurance Bill Projected to Reduce Premium Costs by 17-18 percent
ST. PAUL – The Minnesota House of Representatives has approved the Minnesota Premium Security Plan (HF5), which establishes a state-based reinsurance program on a bipartisan vote of 78-53. This program is designed to stabilize premiums by mitigating the impact of high-risk individuals, or those who are the most sick, on the individual health insurance market. According to Minnesota Management and Budget, the proposal is estimated to reduce premiums by 17-18 percent.
“The bipartisan reinsurance legislation is expected to reduce premium costs and improve stability in the individual market,” said Rep. Deb Kiel, R-Crookston. “Under Obamacare, folks in Northwest Minnesota have been impacted by skyrocketing insurance rates and fewer choices. This bill is a critical step forward as we continue our work to address affordability, accessibility and competition.”
“Earlier this year, we passed a law that provided substantial premium relief for folks hurt by Obamacare,” said Rep. Dan Fabian, R-Roseau. “The reinsurance bill is the next step to remedying our broken individual health insurance market, ensuring the sickest Minnesotans have access to coverage, while also projecting lower premiums by double-digits to provide more affordable coverage for families, small business owners, farmers and folks across our state.”
Prior to the Affordable Care Act, Minnesota had a nation-leading health insurance safety net program. Today, Minnesota’s individual insurance market is a third as large and twice as sick as it was before Obamacare.
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, comprised of members of the public and health plan experts, 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. The Senate is expected to pass a similar proposal in the coming days.