After years of sky-high, ever-increasing premiums and an unstable health insurance market, a law that went into effect April 4 might just help.
Despite “serious concerns,” Gov. Mark Dayton let a rescue plan for Minnesota’s individual insurance market become law, the Duluth News Tribune reports.
Dayton neither signed nor vetoed the bill, meaning it becomes law without his signature.
Up to $271 million per year in pricey medical claims over the next two years will be absorbed in a program called “reinsurance,” the goal of which is to rein in premium costs, stabilize the insurance market and protect insurers from major risks and heavy losses.
Normally, those costs would be paid by insurers and passed on to customers via higher premiums. Now, however, a $542 fund will be established using money from the state’s general fund and a special fund aimed at giving low-income residents healthcare coverage, the News Tribune says.
This move by lawmakers comes after every insurance company left the market in 2017, as well as year after year of some of the highest rate increases in the nation, in part because healthcare costs for a small population of sick people on the individual market were higher than expected. Republican legislative leaders believe the plan can reduce premium rates by 17 or 18 percent for the roughly 190,000 people who buy insurance on their own, as well as encourage insurers to re-enter the market.
NFIB/MN supports the plan.
“This legislation is absolutely critical to stop the death spiral that Minnesota’s individual health insurance market is in,” said Mike Hickey, NFIB/MN state director. “This has been a painful and unnecessary exercise since Minnesota handled the problem of people with pre-existing conditions in the individual market as well as or better than any other state prior to Obamacare.”
Hickey added that the ACA caused the closure of Minnesota’s effective high-risk pool for individuals with pre-existing conditions.
Dayton and Democratic opponents have raised concerns about the source of funding for the program and whether it will actually drive down premium costs.
