Committee hears Department of Commerce proposal to limit premium shock from open Medigap enrollment; bill laid over

Representative Driscoll moved House File 2403 before the House Commerce Finance and Policy Committee and the committee held testimony and public comment on the Department of Commerce’s health insurance policy bill, which includes changes to the Medicare supplement (Medigap) market and to guaranteed renewability rules for individual health plans.

Sam Smith, testifying for the Department of Commerce, described two central pieces: a response to a 2023 law that expanded the ability of Medicare enrollees to move from Medicare Advantage to Medigap during an annual open enrollment period, and a separate change to bring Minnesota’s guaranteed-renewability rules into closer alignment with federal standards. Smith said the department contracted an actuarial firm, Risk and Regulatory Consulting, which estimated an initial premium increase for Medicare supplement plans of about 6% and projected larger cumulative increases over time if adverse selection intensifies. To reduce that risk, Commerce proposed allowing insurers to apply a 10% surcharge for people who enroll in a Medigap plan outside their initial enrollment period while preserving access for people who need coverage.

Public commenters pressed the committee on consumer impact. Rich Neumeister, a lobbyist who said he tracks open-government and privacy issues, told the committee that the actuarial report he reviewed showed possible increases ranging higher than 6% and cited other states, including Idaho, where commenters reported double-digit increases. "There will be some increases," Neumeister said, and urged lawmakers to seek solutions that preserve access for low-income people who rely on Medigap.

Dana Bacon of the Leukemia and Lymphoma Society said blood cancer patients may face large out-of-pocket costs without Medigap and urged the committee to "lean toward protecting consumer access and leaning away from penalizing people for their pre-existing conditions." Several committee members, including Representatives Elkins and Ryar, expressed concern about marketing pressure toward Medicare Advantage products and about the risk of adverse selection if people wait to enroll in Medigap until they get sick.

Representative Driscoll and Commerce staff said the proposed surcharge is intended as a compromise to preserve open enrollment while limiting the premium shock that could follow if many healthy enrollees move into Medigap plans only after they develop serious conditions. Committee members requested the actuarial report; Commerce agreed to make it available to members. Representative Driscoll asked the committee to lay HF2403 over for possible inclusion in a future omnibus policy and finance bill; the committee laid the bill over.