Minnesota lawmakers reach deal to extend reinsurance program

Published 3:59 pm Thursday, March 31, 2022

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ST. PAUL — Legislative leaders announced a bipartisan deal Thursday to extend Minnesota’s health care reinsurance program, beating a deadline by one day in a move to hold down premiums for residents who buy their health insurance on the individual market.

The $700 million deal agreed to late Wednesday authorizes an extension of the program for five years, but funds it for only three years. Republicans reached a compromise with Democrats who have never liked the five-year-old program. They see it as an expensive giveaway to insurance companies that doesn’t solve bigger issues over the costs of health care and prescription drugs.

Premiums would have gone up by “a minimum of 20-25%” this fall without a deal by Friday, said Sen. Gary Dahms, of Redwood Falls, the lead Republican negotiator. The agreement was a condition for getting a required waiver from the federal government under the rules of the Affordable Care Act to continue the program.

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The agreement affects about 167,000 Minnesotans who get their coverage in the individual marketplace, whether it’s via the state-run MNsure exchange or directly from carriers. That includes many small businesses, farmers, independent contractors and other self-employed people.

“This really is a good example of Democrats in the House and Republicans in the Senate working together with the administration on a compromise agreement,” Republican Senate Majority Leader Jeremy Miller, of Winona, told reporters.

Miller said floor votes were expected later Thursday to send the bill to Democratic Gov. Tim Walz for his expected signature.

The lead Democratic negotiator, Rep. Zack Stephenson, of Champlin, said the House still would rather tackle health care affordability with a “public option” for people to buy into a government-run health plan, such as the existing MinnesotaCare program for the working poor.

But Stephenson conceded at a conference committee meeting that the compromise will mean “very significant savings” to consumers in the individual marketplace. For many, he added, “it’s the difference between affordable health care and unaffordable health care.”

In return, he said, Democrats got provisions to let patients with high deductibles spread out their drug copayments instead of struggling to pay them all early in the year, and more coverage for maternal health. But they didn’t get the studies they sought to find alternatives to reinsurance.

Rep. Tina Liebling, of Rochester, told the panel she couldn’t support the deal, saying she and many of her House Democratic colleagues “consider reinsurance to be basically a bridge to nowhere. And we keep extending the bridge, and it’s still a bridge to nowhere.”

Reinsurance was the third major bipartisan compromise for the divided Legislature this year, following a $25 million bill that Walz signed Wednesday to fund research on the neurological disease ALS and a bill awaiting his signature to divest state government from Russia over its war in Ukraine.

But deals remain elusive on averting an unemployment insurance tax increase on businesses, which Democrats have made contingent on “hero pay” for frontline workers who put themselves at risk in the pandemic, and on what to do with the bulk of the state’s $9.25 billion budget surplus.