Tonight, the Minnesota State Senate voted to pass HF5 37-29. Sen. Tony Lourey (DFL-Kerrick), Ranking Member of the Health and Human Services Policy and Finance Committee has released the following statement regarding his thoughts on the bill and the vote.
“I have significant concerns with this bill as it currently stands. Throughout the committee process I have actively attempted to work with the Senate Republican’s to develop a bill that truly addresses affordability and access of health care. Unfortunately, my efforts to date have not been successful,” Lourey said.
“Despite my serious reservations about this bill, I voted in favor of it with the intent of being appointed to the conference committee so that I am in a position to negotiate to improve the bill before it returns to the House and Senate floor for a final vote. I will work with my colleagues to improve this legislation to truly ensure affordability and access to health care for Minnesotans before the final vote,” Lourey said.
“I will continue to be an advocate for improving long-term stability, access and networks, reducing the cost of health care, and increasing much-needed competition in the health care marketplace,” Lourey said. “This includes continuing to advocate for the MinnesotaCare buy in option that was heard in the Senate Health and Human Services Policy and Finance Committee last month.”
Background on Reinsurance bill/HF5:
This reinsurance bill costs $600 million and only provides temporary relief for two years without addressing the underlying causes. 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 Minnesota Comprehensive Health Association (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 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.