Senate Committee Extends Reinsurance Through 2023

March 3, 2022

A bill (SF3472, Sen. Gary Dahms - R, Redwood Falls) that would continue the state’s reinsurance program through the 2023 benefit year was heard this week by the Senate Health and Human Services Finance and Policy Committee. 

The reinsurance program is designed to reduce the cost of premiums for those purchasing coverage in the individual market. It is funded with both federal and state money. It subsidized insurers by paying  a portion of medical bills over a certain threshold. Minnesota’s reinsurance program is scheduled to end when we reach the end of a five-year waiver we received from Center for Medicare and Medicaid Services (CMS). The waiver  can be renewed through action by the Legislature. 

The Minnesota Council of Health Plans, the Minnesota Chamber of Commerce and the Minnesota Business Partnership strongly support the continuation of the program. Several organizations representing serious, acute and chronic health condition groups also testified in favor, citing reduction of healthcare premiums and the increased number of individuals obtaining health insurance through the individual market. 

Opposition to the bill came from SEIU Healthcare Minnesota, Minnesota Nurses Association, TakeAction MN, and The Land Stewardship Project, which argued that reinsurance is an insufficient tool to control health insurance premiums. Specifically, among other concerns, these groups noted that reinsurance continues to lower the federal contribution to MinnesotaCare. 

The bill passed out of committee and was referred to the Senate Finance Committee, which will discuss the bill’s fiscal note.