Legislators Vote to Extend State Reinsurance Program

March 31, 2022

Plans to extend Minnesota’s reinsurance program, designed to reduce volatility in the individual health insurance market, appeared to be on track following a legislative compromise reached on March 31.  

A Conference Committee formed to create a compromise between the Senate and House versions passed a revised bill on an 8-2 vote. That bill was expected to be passed by the Senate and the House the night of March 31. 

The Senate bill (SF 3472, Sen Gary Dahms, R-Redwood Falls) proposed reauthorizing the program for five years, while the House proposed a one-year extension and new insurance requirements. A 10-member conference committee agreed to a three-year extension. 

The reinsurance program is designed to reduce the volatility of premiums for those purchasing coverage in the individual market. Under Minnesota’s program, the cost of high-cost claims is not borne exclusively by insurers. Rather, the state’s reinsurance fund covers 80 percent of an individual’s annual claims costs between $50,000 and $250,000. 

Notably, the final bill includes two important coverage expansions. One requires insurers to offer an insurance product that allows enrollees to spread out high deductible payments into smaller monthly installments over the entire year. This provision was in the House version of the bill, but not the Senate’s. The MMA, along with other stakeholders, have supported the inclusion of this provision in the final bill. 

The final bill also includes language requiring health plans to provide coverage for comprehensive postnatal care for both babies and mothers. This expansion is consistent with recommended care developed by the American College of Obstetricians and Gynecologists.