The last four years and the Republican-led 2017 legislative session were full of empty Republican promises to “fix health care”. In the shadow of the congressional Republicans’ walking away from health care reform, Minnesota’s preliminary premium rates were released. Today’s preliminary health insurance premium rates, show that despite Republicans throwing $900 million of taxpayer dollars at insurances companies, instability and unaffordable premiums are likely on the horizon for Minnesotans buying individual and small group health insurance. The $543 million reinsurance plan, touted as the Republican “premium security plan to create more stability”, is only “secure” through through 2019. Legislators will have to find millions of dollars more in 2019 in order to keep the yet-to-be-created reinsurance pool. That’s hundreds of millions of dollars out to the door for a plan that does not provide any reforms, instead hands money out to insurance companies.
Adding to the instability of the state of health care, President Trump has threatened, via an early morning tweet, to end one of the three legs of the Affordable Care Act stool. The tweet called to end subsidies that allow insurers to uphold the requirement that they offer insurance to all consumers regardless of health status or preexisting condition. Ending these subsidies would be the death-blow to the ACA, reversing the progress made in reducing uninsured rates and getting people coverage they can afford.
“Republicans talked a good game, but have failed to deliver for Minnesotans,” said Sen. Tony Lourey (DFL-Kerrick), Ranking Member for the Senate Health and Human Services Finance and Policy Committee. “Minnesotan Republicans, like our President, have discovered that health care is complicated. Their budget-busting health care bill, is yet another short-term solution to a long-term problem. Simply propping up the individual insurance market with one-time money does not provide the reforms necessary for long term market stability.”
“Republicans have spent years cynically bashing MNsure at the capitol and on the campaign trail, but today we see that we are no further toward stabilizing the marketplace, then we were in January,” Assistant Caucus Leader Sen. Jeff Hayden (DFL-Minneapolis), Ranking Member for the Senate Human Services Reform Finance and Policy Committee said. “Minnesota Republicans have proved themselves to be just as inept at passing long-term plans to fix health insurance costs as Congressional Republicans and President Trump.”
Preliminary health insurance premium rates are the projected premiums that Minnesotans on the individual market will have to pay for their health insurance. This is the first-year preliminary premium rates, which are proposed by insurance providers, have been released ahead of the final fall deadline for rates. The rates were announced to reflect two different scenarios, one where the state does not receive a federal waiver to operate the $543 million reinsurance pool Republicans created this year, and one where the state is granted the federal waiver and permitted to set up the reinsurance pool. Both scenarios spell a similar story for Minnesotans on the individual market: premium rate uncertainty and unaffordability.
Like their congressional counterparts, Minnesota Republicans have failed to deliver long-term premium relief for Minnesotans on the individual market. Rates proposed without reinsurance could go down as much as 25 percent, or up as much as 31 percent. Proposed rates with reinsurance could go down as much as 40 percent or up as much as 11 percent. These numbers can be hard to parse because Minnesotans are currently only paying 75 percent of last year’s premiums due to the premium reimbursements passed in SF1–making these potential premium moderations or increases even more challenging for consumers to afford. This means a 25 percent premium decrease is necessary in order for a consumer to just pay the premium they are paying this year. But the biggest, unaddressed problem remains that even if rates go down, there is no plan to continue reinsurance past 2019.
“Minnesotans may remember that the 2017 session started with Republicans putting their finger in the dyke, passing a one-time premium relief package, which made premiums more affordable for many Minnesotans, but failed to follow up short-term premium relief with the necessary structural changes to make the market stable, long term,” Hayden said. “Republicans made the wrong choices for our state, their choices mean that Minnesotans will once again likely face high, unaffordable premiums and uncertainty.”
“No one should be surprised that millions in giveaways to insurance companies wasn’t the solution to reduce the cost of health insurance, long term,” Lourey said. “The most reasonable solution to stabilize the health insurance market long term is the MinnesotaCare Buy In. But the MinnesotaCare Buy In was ignored by Republicans, despite its potential to reduce premiums by 13 percent for Minnesotans and ensure families across to quality, affordable health care.”
Final premium rates that Minnesotans on the individual market will pay will be announced on October 2. The federal government will respond to Minnesota’s request for an innovation waiver no later than December 27. If granted, this waiver will permit Minnesota to set up the two year, $543 million reinsurance pool.
Background on the MinnesotaCare Buy In
MinnesotaCare is currently available only to Minnesotans who do not get insurance through their employer, or another public program, and earn less than 200 percent of the Federal Poverty Guidelines or approximately $23,700 for an individual and $48,600 for a family of four. The MinnesotaCare Buy In would bankroll itself—requiring no additional taxpayer funds, after one-time setup costs. The initial startup would cost just $12.9 million, thereafter the program would be funded entirely through premiums paid by Minnesotans who purchase MinnesotaCare coverage. In Greater Minnesota, the health insurance options are especially limited. MinnesotaCare Buy In would give consumers choice and provide much-needed marketplace competition, to keep costs low. The average cost would be $69 less per month than the average statewide premium Minnesotans are currently paying for private coverage or a 13 percent savings.