On a near party-line vote the Minnesota State Senate has passed the reinsurance bill. Sen. Jeff Hayden (DFL-Minneapolis), Ranking Member on the Human Services Reform Finance and Policy Committee has released the following statement responding to the reinsurance “fix” bill’s passage.
“Minnesotans are scrambling to find a way to pay for their health insurance and seriously concerned about what will happen next year. I know I’m not the only one who has heard from their constituents about these serious concerns facing family budgets. But tonight, Republicans are raiding the funding mechanism for low-income health insurance coverage, and putting that money directly into the hands of insurance companies. Worse yet, we have no guarantee and no assurances that this bill will lower rates or increase access,” Hayden said.
“This bill is nothing more than insurance for insurance companies. While costs to consumers are skyrocketing, networks are contracting, and the long-term stability of our health insurance marketplace hangs in the balance, Republicans are writing a $600 million check to our insurance companies on nothing more than the hope that they will give Minnesotans some reprieve,” Hayden said.
“Minnesotans expect better. I am committed to efficient and sustainable solutions to our health care challenges, like the MinnesotaCare Buy In. As this session progresses, I will continue to fight for solutions that deliver affordable health insurance, improved networks, that do not threaten the stability of our critically important public programs,” Hayden said.
Background on HF5:
This is another GOP “fix” which costs $600 million and only provides temporary relief for two years. While the goal of the legislation is well-intentioned, this proposal takes funding from the Health Care Access Fund (HCAF) that is intended to be spent on health care for low income Minnesotans to help insurance companies.
Under the bill, when an enrollee reaches $45,000 in insurance claims, 80% of claims would be paid by the Minnesota Premium Security Plan until those claims hit $250,000. So health insurance companies would cover all claims up to $45,000, 20% of claims from $45,000 to $250,000, and all claims over $250,000.
The bill establishes MCHA as the entity to administer the state reinsurance program. Under the bill, insurance companies get paid for high cost claims, but there is no assurance from insurance companies that they will make their rates more affordable or expand their provider networks and there is nothing in the bill that prevents them from offering the same expensive and limited plans.
Since the funding mechanism is from the HCAF and the budget reserves for only two years, a funding source would need to be found going forward – either continue state funding, apply an assessment to Minnesota Comprehensive Health Association (MCHA) members, or seek federal funding.
The state legislature must have something in law by the end of the month of March to be meaningful and have an effect on the 2018 insurance market. Health plans are making decisions about whether or not to stay in the market now, and the deadline for rate filings is later this spring.