Health insurance help in the works, but not done at Capitol

Health insurance bills on state capitol fast track

ST. PAUL, Minn. (AP) - Minnesota lawmakers are rushing to cobble together a $300 million relief plan for residents facing massive health insurance premium hikes.

But even as bills began passing through committees at the Legislature Tuesday, there was no guarantee that checks for shoppers on the individual market would be on their way soon. Logistical hurdles and disagreements between the Republican-controlled Legislature and Democratic Gov. Mark Dayton could delay the relief.

The goal is to help roughly 125,000 customers in Minnesota who buy private non-group policies in the individual insurance market, and yet earn too much money to qualify for discounts available only for those who buy a private policy using the MNsure exchange. 

Dayton's plan would cut premiums by 25 percent for all residents who don't get federal subsidies. The state would rely on insurance companies to issue instant discounts, and then reimburse those insurance carriers.

Invoices would be copied to the Dept. of Commerce to guard against fraud.

The GOP's plan would scale relief based on income, and require the Minnesota Management and Budget Dept. to process applications and issue checks to the insurance customers directly. The administration says that approach is too cumbersome and could mean checks aren't sent out until next year.

State Budget Commissioner Myron Frans testified in several different committees Tuesday, telling lawmakers that creating a web-based apparatus to take applications, check for residency and income eligibility would require hiring 100 new employees.

Doing it through a third party vendor would require the state to design an intricate set of Request for Proposals for the bidding process, and then the successful bidder would need months to set up web-based portals to communicate with the Internal Revenue Service, Minnesota Dept. of Revenue and insurance carriers.

He said it could take a year and cost $20 million to implement the plan, which would only exist for one year.

Frans appealed to lawmakers to consider the quicker, simpler plan proposed by Gov. Dayton, because the insurance companies already know who their customers are and what plans they're purchasing.

"The worst thing that could happen is that customers are going to get cheaper insurance. They're not going to get a check. They're not going to get cash. They're just going to get a lower premium."

He pointed out that most private non-group insurance customers face a Jan. 31 deadline for enrolling in a 2017 plan, and if there's no plan in place they may opt against buying coverage.

The Republicans are loading up their relief legislation with several permanent reforms, such as allowing for-profit companies from beyond Minnesota's borders to sell insurance in this state for the first time in decades. 

During the Senate Commerce Committee hearing Tuesday, St. Louis Park Democrat Ron Latz warned that companies from other states don't have to follow Minnesota regulations.

"For those people in greater Minnesota who have one option, we’re trying to give them another option," Sen. Michelle Benson, the bill's chief author, explained.

"We’re trying to see if anyone wants to come in and serve those citizens and provide them individual health coverage."

Some of the bills also would create a new reinsurance program -- a pool for higher risk, higher cost customers that would take some of the financial pressure off the health plans.

Sen. Jeffrey Hayden of Minneapolis said he'd heard it could cost as much as $500 million to create high risk reinsurance program.

Sen. Benson, who now chairs the Health Committee in the Senate, said she doesn't have a exact estimate but had been asking the Commerce Dept. for such a figure for the past year.

During one hearing Tuesday, Civil Law Committee Chair Peggy Scott flatly rejected the Dayton administration solution, saying she has no trust in the Minnesota Dept. of Commerce.  She asserted that regulators there knew last May that rates for non-group policies would be soaring, but kept that information under wraps.

Once the plans announced their rates in October it became a political boon for Republicans, who were able to point the finger at the Affordable Care Act. The campaign rhetoric also created the impression the state's insurance exchange, MNsure, had contributed to the rate crisis even though that was actually not the case.

MNsure does not set insurance rates, but instead is a portal for selecting plans and applying for premium subsidies, or instant discounts funded by the Affordable Care Act. More than 103,000 people have enrolled in private insurance plans for 2017 taking advantage of MNsure discounts.

Those subsidies are available to those with incomes below 400 percent of the federal poverty line. The Republican premium relief plan would be open to those who earn less than 800 percent of the poverty rate.

MNsure created a lot of ill will because of customer service problems at its launch.  But the money spent creating MNsure didn't affect the sagging bottom line for insurance carriers.

Those insurers lost money due to comprehensive coverage rules ushered in nationally by the Affordable Care Act. They were no longer allowed to deny coverage to people with preexisting conditions, they could no longer set lifetime caps, and they were required to pay for a set of screening procedures.

And at the same time Congress blocked funding for the so-called "risk corridors" element of the Affordable Care Act, which had been designed, among other things, prop up the the individual insurance market.


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