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Committee hears funding options for Minnesota reinsurance as officials warn of 25% premium spike if program lapses
Summary
The Minnesota House Commerce Committee heard bipartisan testimony on a proposed funding plan to extend the state's reinsurance program, which officials say could prevent a projected 25% or larger increase in individual-market premiums if it is not renewed.
The Minnesota House Commerce Committee held a hearing on the state's reinsurance program and proposals to fund it, with Deputy Commissioner of Insurance Julia Dreyer warning that “Without action this year the premium security plan will be depleted and the Minnesotans on the individual market are at significant risk of a 25% or more premium increase.”
The session focused on how to pay to continue the Minnesota Premium Security Plan (the state's reinsurance program), which reimburses a portion of very high medical claims and has been credited with lowering premiums and stabilizing the individual insurance market since 2018. The Commerce Department and a range of business groups, insurers and advocacy organizations testified on competing funding approaches and the program's risks if left unfunded.
Why it matters: Reinsurance reduces the headline premiums people see on the individual market by reimbursing plans for a band of very large claims, which in turn lets insurers set lower rates. Commerce staff said the program covers roughly 187,000…
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