Last October, Governor Mark Dayton admitted that the projected significant jump in premiums for 2017 is making the Affordable Care Act “no longer affordable.” He proposed one fix for the estimated 123,000 Minnesotans faced with surging premiums of 55% or more. By providing a 25% premium rebate to those who purchase health insurance on the individual market, who are not eligible for federal tax credits/subsidies, the affective premium increase for these individuals will be reduced to about 16%.
Dayton stated early in January, “For more than two months, I have proposed this relief, so that 125,000 Minnesotans can better afford the health care they need and deserve.”
Farmers, small business owners, independent contractors, and others who purchase individual health insurance are encouraged to first go to MnSure to confirm whether or not they are eligible for federal tax credits. About 5% of Minnesotans purchase their health insurance on the individual market. It has been estimated that as many as 100,000 Minnesotans who could qualify for financial assistance with their heath insurance costs have failed to take advantage of federal assistance. Individuals with incomes over $47,520 or families of four with incomes over $97,200 do not qualify for federal tax credits. They are at 400% or above of the federal poverty level.
Dayton worked with legislative leaders last fall, but they failed to reach an agreement at that time. He suggests if the rebates had been approved late last year in special session, relief for many could already be a reality. If the governor’s proposal becomes law, the rebate would be administered by health insurers who would get state funding to pay 25% of qualified Minnesotans’ monthly premium bill. The rebate would appear on peoples’ bills, resulting in the lowered premium. It is estimated that these rebates which would go to about 2% of Minnesotans would cost about $313 million. This would include “all” individual market consumers that are not eligible for federal tax credits.
The Republican-led Minnesota House approved a $300 million health insurance premium rebate package on January 19. The House bill includes additional provisions like the creation of a farmers’ health care co-op. There is a provision which would allow insurance companies to sell policies with less benefits than those that have been federally mandated. Less costly policies like those may not be required to cover maternity care or treatment of chemical dependency or cancer.
The Senate passed a rebate bill a week earlier than the House. It has an appropriation of $150 million for the establishment of a reinsurance program in the state. This program would help insurance providers cover the expense of high cost patients. The Republican bills have rebate distributions based on income, which would be distributed by the state, not through the insurance company. The House bill provides for 25% rebates that would only go to individual market consumers who make less than 800% of the federal poverty rate or $95,040 for an individual or $194,000 for a family of four.
Both the House and the Senate bill will allow for-profit maintenance organizations, HMOs, to operate in the state.
The House and Senate bills are going to Conference Committee to work out the differences in the two bills. One question to be resolved is should any reforms to health care be addressed in separate legislation? The governor and legislators all agree that there should be relief. As usual, the how and the introduction of other related issues/reforms are slowing the process.
People Waiting for Action/Relief
DFLers argue that the governor’s plan will be able to be implemented much quicker, giving more immediate relief. They insist that the Republican plan which is to have distributions based on income and by the state would delay relief for many months, some say a year.
Sheri and Vince Sexton, Millville, operate a dairy farm and have always purchased their own health insurance. Their premium increased 40% in 2017 to $2,200 per month ($26,000 for the year) with a $13,000 deductible. Both have undergone treatment for cancer. They certainly understand that health insurance is a must. “We ask the Legislature to compromise with Governor Dayton and quickly pass premium relief that takes effect right away.”
Tracie Loeffler and John Donaghy, St. Paul, purchase individual health insurance for themselves and their son. He is a self-employed software engineer and she is an adjunct professor. Their premium was increased 62% for 2017 and costs more than their monthly mortgage payment. Their deductible is $13,100. They expect to pay over $30,000 out of pocket for health care expenses this year. Tracie says, “We literally cannot afford to wait for premium relief.”
John Christiansen, Minneapolis, purchases health insurance now on the individual market since his employer stopped providing health coverage. Last year he paid $283 per month, this year it has increased to $505 per month. Christiansen says he has a pre-existing condition and needs high-quality, affordable health coverage.