How can something that sounds so bureaucratic be so controversial…and important?
In the Minnesota Legislature, that’s officially called the Premium Security Plan, but it usually goes by the only slightly more captivating name of “reinsurance,” and it is what it is. used by the state to stabilize the individual and small health insurance marketwhich is used by about 170,000 inhabitants.
Basically, the state is putting money into a fund to help insurance companies cover particularly high medical bills, a move that has, sometimes grudgingly, been credited with falling premiums while increasing the availability of the plans.
But because it reflects two very different responses to how to serve a relatively small niche of the health insurance market, it has also become the issue of sharp disagreement between Republicans and DFLs in the legislature, subject to last-minute deals often linked. be brought to other, mostly unrelated problems.
For example, in 2021, a one-year extension of the program was included in a final agreement between administration Tim Walz and legislative leaders, which also included a plan to hand out $250 million in bonuses to frontline workers. But while the bonuses have yet to be paid, the reinsurance program has been funded, in part with money the state has received under the federal US bailout plan.
What to do next — continue to fund reinsurance, for how long and at what cost — is expected to be another major conflict at the end of the Capitol session.
Why so controversial?
Sold as a temporary aid in 2017 to stabilize the price and availability of certain health plans in Minnesota under the provisions of the federal Affordable Care Act, the reinsurance program remains in effect five years later at a cost of $200 million or more per year for the stands. year.
But critics say that what was meant to be a temporary solution has become a bridge to nowhere, because no more substantive and permanent solutions have emerged. And unless the plan is re-approved next month (and funded by the end of the session), supporters warn of a return to high premiums and lack of plan availability that initially initiated the creation of the program.
The pot of money spent on paying for the program is viewed very differently by the two political parties: To Republicans, reinsurance is a fund to help cover the medical bills of expensive policyholders. “It really just pays for care at negotiated rates for the individual market,” said R-Ham Lake Senator Michelle Benson.
For DFLers, it’s a rescue mission. “We reinsure insurers and put a billion dollars into insurance companies,” said Senator John Marty, DFL-Roseville.
How it works
Just over half of Minnesotans receive health insurance through an employer, while a further one-third receive coverage through the state-federal medical assistance program or Medicare for seniors. Only about 3 percent of the state’s population — 163,000 people — buy policies from private insurers. As with other federally regulated insurance policies, these plans must cover pre-existing conditions, prescription and substance abuse drugs, and mental health care. Preventive care must also be fully reimbursed.
The Affordable Care Act included an online federal marketplace where buyers could shop and check how much subsidy they could get, but Minnesota was one of the states that set up its own marketplace: MNsure† Democrats appreciate the Affordable Care Act halving the number of Minnesotans without health insurance.
Reinsurance is considered important to the individual market, although it is also used by some small groups of employers to take out policies. Simply put, insurance companies that sell policies to individuals and small groups of employers can keep premiums relatively low because they know they can get help from the state fund to cover particularly high medical bills. Instead of charging all policyholders higher monthly premiums to offset those who cost more, those higher costs are borne by the state fund.
The creation of the program was credited by the State Department of Commerce with the settlement of a roiled market†
But opponents would rather use those same funds to subsidize premiums for working families and individuals who either lack medical care or receive insurance through an employer. Walz has suggested: to get more Minnesotans to buy a policy through MinnesotaCare, the state-administered basic health plan aimed at those who don’t qualify for Medicaid but don’t earn enough to pay for private insurance. a buy in bill goes through House committeesand is included in the current governor’s budget proposal.
But without GOP support for those proposals, many recognize that no other solution is available any time soon.
“Reinsurance was always intended as a bridging program. It’s a very effective bridging program and I’ve supported it in the past because it keeps premiums low,” said Representative Zack Stephenson, the Coon Rapids DFler who chairs the House Commerce Committee. “But even the people who created the program didn’t intend for it to be permanent. It’s not the most artful solution. We actually only buy insurance premiums.”
Two accounts, two approaches
Stephenson is the main sponsor of the reinsurance version of the House DFL. It reauthorizes the program, which is required by federal officials before agreeing to waive other rules about how the federal government shares coverage costs. He said he expects the funding needed to expand the program will be part of the budget negotiations at the end of the session.
But Stephenson’s account (House file 3717) also includes a $4 million study of the health care and insurance system, with a view to implementing reforms that could end reinsurance while preserving insurance availability and affordability.
Stephenson said just having a policy with premiums within reach won’t help if the co-payment and deductible are too high. And advocacy groups that traditionally support the DFL, including TakeAction Minnesota and unions such as SEIU Healthcare, the Minnesota Nurses Association and AFSCME Council 5, are pushing for the program to address issues of high co-payments and deductibles.
But those changes were not acceptable to Republican leaders on the matter. Republicans who control the Senate want what they call a clean bill: reauthorization plus five years of funding, about $1 billion.
“It’s hard to find something that does what reinsurance does at the price it does, and how it’s spreading it in the market,” said Gary Dahms, chair of the Senate Commerce Committee, R-Redwood Falls, noting that 14 other states either adopted or are considering reinsurance as part of their health insurance systems.
Technically, the bills currently being considered in both the House and Senate reauthorize the program. That’s something federal health regulators demanded shortly before considering giving it to the state an exemption from some provisions of the Affordable Care Act† As one of only two states with a state-administered basic health plan, Minnesota needs that waiver to continue receiving the federal money flowing from the ACA.
But the state’s other system also leads to undesirable consequences, most notably the relocation of some federal funds from MinnesotaCare to the reinsurance fund. Replacing those lost funds in the amount of $50 million in general state funds is part of the DFL version of the bill.
Walz said he supports the expansion of reinsurance but continues to push for other ways to get coverage to people who need it. “I’m not a fan of reinsurance because it’s expensive,” Walz said Monday. “I’m also a realist and understand that it helps keep prices up for people. We know the time will come when we’ll have to deal with this reinsurance piece. We’ll have to talk about that.”
The GOP account, Senate file 3472, passed the Senate Monday with five DFL votes. It does not include any of the DFL changes described by Bentley Graves, a lobbyist at the Minnesota Chamber of Commerce, as “extraordinary provisions” that could jeopardize passage.
Rep. Tina Liebling, a Rochester DFLer who chairs the House Health Finance and Policy Committee, told chamber lobbyists she doesn’t want the bill at all, “so if you think the House will pass it, you may need to get behind some of the other measures.” that accompany it.”