ST. PAUL, MN --The Minnesota House of Representatives has approved the Minnesota Premium Security Plan (HF5), which establishes a state-based reinsurance program on a bipartisan vote of 78-53. This program is designed to stabilize premiums by mitigating the impact of high-risk individuals, or those who are the most sick, on the individual health insurance market.
“The cost of health insurance has been a budget crippler for many Minnesota families,” said Rep. John Poston (R-Lake Shore). “The reforms laid out in House File 5 will help fix that; it is estimated that health insurance premiums could drop 17-18% if this bill is signed into law.”
Prior to Obamacare, Minnesota had a health insurance safety net program and it was a model for the nation. Today, Minnesota’s individual insurance market is a third as large and twice as sick as it was before Obamacare.
According to the legislation, the Minnesota Premium Security Plan will be administered by the Minnesota Comprehensive Health Association (MCHA), which for over forty years ran a high risk pool that brought stability to the individual market and ensured the sickest Minnesotans had access to needed coverage. It will be funded using existing revenue sources.
The MCHA board, comprised of members of the public and health plan experts, will design payment parameters to mitigate risk, stabilize or reduce premium rates, increase participation, and account for federal funding available for the plan.
The board will have authority to set:
- Attachment point beyond which costs are eligible ($50,000 or more)
- Coinsurance rate (between 50-70%)
- Reinsurance cap ($250,000 or less)
Parameters will be submitted to the Department of Commerce for approval. The board will also have the authority to audit eligible health carriers and is required to contract with an independent auditor for an annual reinsurance program. The Senate is expected to pass a similar proposal in the coming weeks.