February 11, 2019
The Honorable Senator Dahms
Minnesota Senate Commerce Committee
The Honorable Representative Halverson
Minnesota House Commerce Committee
RE: Senate File 761/House File 629
Dear Chairs Dahms and Halverson:
On behalf of the Minnesota Hospital Association (MHA) and our 141 hospital and health system members from across the state, I offer the following input for your Committees as they consider S.F.761/H.F. 629 regarding Minnesota’s premium security (reinsurance) program.
MHA appreciates that simply allowing the reinsurance program to end will cause insurance premiums in 2020 to increase significantly, making health insurance even less affordable for more Minnesotans. Also, we recognize that early legislative action to clarify whether reinsurance subsidies will remain in place will decrease administrative burdens for health insurance companies that will submit their initial premium rates for 2020 by May 2019.
Therefore, MHA respectfully suggests that the Committees extend the reinsurance program for one year at this early stage of the session. This will decrease some of the uncertainty for health insurance companies as they calculate their 2020 premium rates. At the same time, a one-year extension will not prematurely tie the Legislature’s hands before it turns its attention to longer-term health care issues such as the provider tax sunset, ongoing financing of MinnesotaCare and Medicaid expansion, and the Health and Human Services budget as a whole.
Extending the program for one year now does not preclude legislation later this session to keep the program in place for additional years beyond 2020. But that decision should be made in concert with other policy and finance decisions, particularly whether the provider tax sunset is repealed.
Current law requires unspent reinsurance program resources as of December 31, 2019, estimated to be $280 million, to be returned to the Health Care Access Fund (HCAF). The choice your Committees face is between (a) allowing $280 million to revert to the HCAF to pay for health coverage for low-income Minnesotans, as is called for under current law, or (b) redirecting $280 million back to the reinsurance program. MHA believes the most prudent approach is to extend the reinsurance program for one year, but wait to decide whether to grant a longer extension until sustainable funding for MinnesotaCare and Medicaid expansion is secured.
Thank you for your consideration of MHA’s comments.
Lawrence J. Massa, M.S., FACHE
President & CEO