Minnesota's Bipartisan Compromise to Lower Health Premiums

by | January 27, 2017

By Erin Golden

The state Legislature on Thursday overwhelmingly approved $326 million to be distributed among Minnesotans faced with hefty health insurance premium increases this year, sending the bill to Gov. Mark Dayton, who signed it.

About 125,000 Minnesotans, facing premium spikes of 50 percent or higher, should now see their monthly insurance bills drop by 25 percent for all of 2017. The measure combines the premium rebate plan first sought by DFLer Dayton with a package of health insurance law changes offered by Republicans, a rare high-profile bipartisan agreement that sets the table for a much bigger discussion to come at the State Capitol about stabilizing the state's individual health insurance market.

"Today is a good day," said Rep. Tim Miller, R-Prinsburg, who said he planned to share the news with a couple in his district who contacted him about their health insurance struggle. He encouraged colleagues to similarly spread the news to constituents.

"With this bill, we're going to be able to improve health care in Minnesota, something we've been trying to do for the last few years," Miller said.

Dayton signed the bill late on Thursday. In a prepared statement, he said he does not agree with everything in the bill but appreciated that compromises were made to reach an agreement.

"The Legislature and I must now turn our attention to making good health care coverage available and affordable for all Minnesotans," he said. "As I said the other night, 'If we all give a little, Minnesotans will gain a lot.' That spirit prevailed in negotiating this legislation. May it continue."

Eligible insurance customers likely will start seeing discounts in their March or April bills and also get retroactive rebates for the first few months of the year.

The roughly 125,000 people expected to qualify buy their own insurance on the individual market but make too much to get federal subsidies to help pay for it: That's people making more than $47,520 annually, or $97,200 for a family of four.

Insurance companies will automatically provide the rebates via payments by the state. The passage of the premium-relief bill comes just days before the Jan. 31 enrollment deadline for the state's MNsure market.

The package includes $15 million to help cover people with serious medical conditions who lose their insurance.

It also allows farmers to form health care co-ops; allows for-profit health maintenance organizations, or HMOs, the right to operate in Minnesota; and requires insurance companies to announce proposed rate changes earlier.

The Senate passed the bill by a vote of 47-19, and the House followed suit a few hours later on a 108-19 vote.

All dissenting votes came from DFLers, though the bill won plenty of DFL support in both chambers.

Rep. Laurie Halverson, DFL-Eagan, said she was glad to be "giving 125,000 Minnesotans a pretty big, important win." But she criticized the policy changes included in the measure, arguing that "we at best don't know if they're going to help and at the very worst might well destabilize our market further."

Rep. Erin Murphy, DFL-St. Paul, said Minnesota's 40-year-old law that allows only nonprofit insurance carriers to operate here tries to keep companies from putting profits above patient care.

"If we insert a profit motive and returns to shareholders as the law of Minnesota, instead of returning those investments back to communities and our care, people who are sick are going to get the short end of the stick," Murphy said.

Several DFLers pointed to other states that saw for-profit insurance companies pull out of the individual market as evidence that the same could happen here.

Republicans struck back, repeating criticisms that DFL support for the Affordable Care Act and the MNsure program caused problems with higher premiums and carriers leaving the market. They said changes to the health care system need to be made soon to avoid problems in 2018.

"Minnesotans aren't just expecting us to give them premium relief and then throw a parade in our honor in downtown Minneapolis," said House Majority Leader Joyce Peppin, R-Rogers. "They're expecting us to try to fix the problem."

Senate Majority Paul Gazelka, R-Nisswa, praised the work of his GOP colleagues, DFL lawmakers and Dayton, who he said showed a willingness to compromise.

He noted that the Legislature, four weeks into its five-month session, already has passed two significant bills: Thursday's health care measure and a small tax package last week. The quick action on health insurance followed months of sparring over how to deal with rising premiums.

"This is the second bill [passed] in January that we were not able to get done in the past," Gazelka said.

Republican leaders said they want to focus on "reinsurance." Gazelka said Dayton has pledged to work on such a proposal that would use state funds as insurance for companies facing unusually high claims.

(c)2017 the Star Tribune (Minneapolis)