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Minnesota Senate Republicans propose extending reinsurance program

(The Center Square) – Extension of the state’s reinsurance program another five years was proposed in a bill Tuesday by Minnesota Senate Republicans.

SF 3472 would return the coinsurance level to 80%, saving the average enrollee $130 monthly, while currently the average enrollee saves $100 monthly, at a 60% coinsurance level, a news release said.

Minnesota lawmakers decreased coinsurance for the Minnesota premium security plan from 80% to 60%, with a reinsurance cap of $250,000 and an attachment point of $50,000, via HF 33 in 2021.

“We must act now to fully fund our individual health insurance markets,” said Sen. Gary Dahms, R-Redwood Falls. He’s the chief author of the bill. “Minnesota families, farmers, and small business owners cannot afford a drastic increase in their premiums. Reinsurance has proven to work and there is no reason to not extend this successful program.”

Insurance premiums for the individual market rose in 2016 following the Affordable Care Act and some counties had solely one health care insurance plan available, the release said. In 2017, Senate Republicans passed the reinsurance program to lower premiums and increase competition among providers.

“Following reinsurance implementation, costs stabilized and every county in Minnesota has at least two health-care plan options to choose from,” the release said.

Watonwan, Faribault, Waseca, Steele, Dodge, Mower and Freeborn each have two, while all other Minnesota counties have at least three, according to a 2022 Individual Market map showing the number of issuers in actively marketed plans.

The CMMS and Office of the Assistant Secretary for Planning and Evaluation’s Section 1332 Waiver Evaluation Report of the Minnesota Reinsurance program said between 2017 and 2020, benchmark premiums decreased 25.5% in Minnesota compared with an increase of 25.9% nationally. In those years, enrollment in Minnesota increased one-tenth of a percent while the U.S. overall enrollment decreased 6.6%.

“These trends suggest that Minnesota’s waiver might have lowered premiums and stabilized enrollment in the individual market,” the report said. “However, these analyses are based on comparisons to the overall United States – rather than a comparison group of states whose insurance markets are most similar to those of Minnesota.”

Under Section 1332 of the Affordable Care Act, as of 2017, states can have “innovation waivers” to modify key parts of the law as long as the coverage under the waiver is at least as comprehensive and affordable as without the waiver, covers a comparable number of residents and does not add to the federal deficit.

As of June 2021, Minnesota is one of at least 16 states that have the waivers, the National Conference of State Legislatures reported in July 2021. Maine passed a law in 2020 saying it would seek federal approval to extend the reinsurance program to small group plans. Colorado lawmakers decided in 2021 to require insurance commissioners to seek a waiver to implement standardized health benefits plans in the individual and small-group marketplaces and identify any savings to the federal government attributed to implementing standardized health benefits plans in order to receive federal pass-through funding.

SF 3472 was heard in the Senate Commerce Committee on Monday and will move to the Senate Health & Human Services Committee on Wednesday, the release said.

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