Committee advances reinsurance reauthorization to Ways and Means after lengthy funding debate

The House Health Finance and Policy Committee on March 17 voted to refer House File 837 — a reauthorization of Minnesota’s reinsurance program for the individual insurance market — to the House Ways and Means Committee after several hours of testimony and debate over funding and program design.

Representative O'Driscoll, the bill’s author, described reinsurance as a program that stabilizes the individual market by partially reimbursing insurers for very high claims. He said Minnesota’s program helped preserve the market after insurers threatened to leave in 2016 and credited it with lowering individual-market premiums by roughly 20 percent when the program was first implemented. “If we decide in Minnesota that we don't want to renew the reinsurance program, those really aren't cost savings for us,” O'Driscoll said, warning of increased uncompensated care and potential clinic or hospital financial stress.

Supporters from health plans, hospitals, employer groups and independent agents testified that reinsurance lowers premiums for tens of thousands of Minnesotans and subsidizes high-cost medical care that would otherwise pressure the individual market. Dan Andreessen of the Minnesota Council of Health Plans said reinsurance subsidizes claims paid to providers and that independent, actuarial reports and quarterly breakdowns published by the state show reinsurance payments go to pay medical claims for chronic and high-cost conditions.

Opponents and critics — including a union public-affairs coordinator and some consumer advocates — argued reinsurance has become a recurring corporate subsidy paid from state funds and urged alternative funding mechanisms, such as an assessment on insurance carriers rather than general fund appropriations. Sydney Spreck of the Minnesota Association of Professional Employees said the state has become a national outlier in public funding of reinsurance and called for insurers to bear more of the cost.

Several funding options were discussed in committee. Representative Elkins offered, then withdrew, two amendments that would have put alternative funding ideas on the record: (1) an assessment on insurance industry members of the Minnesota Comprehensive Health Association (a governor-proposed option) and (2) a modest increase in the provider tax (healthcare access fund) to partially pay the cost. Deputy Commissioner Julia Dreyer of the Department of Commerce told the committee the governor’s budget contemplates an assessment on insurers to avoid relying on general fund dollars.

Testimony included program numbers cited by witnesses: reinsurance subsidized high medical costs for more than 4,200 patients in 2023; the program historically lowered premiums by around 20–25 percent; and cost estimates for continued reinsurance in the current bill ranged in discussion from roughly $413 million to more than $500 million depending on assumptions and mandates. Several witnesses cautioned that the final price depends on policy choices, federal matching calculations and recent state policy changes.

After discussion, the committee approved a voice vote to refer HF837 to Ways and Means. Representative O'Driscoll said the bill is a starting point to provide negotiators in Ways and Means flexibility to weigh funding options and to work toward a sustainable, multi-year solution for the program.

Votes at a glance: House File 837 — referred to Ways and Means by voice vote; A3 and A4 amendments were offered by Representative Elkins and subsequently withdrawn.