Senator Wicklund proposes direct premium subsidy as alternative to reinsurance; committee approves amendments and refers bill

Senator Wicklund introduced Senate File 10 24 as an alternative to the state's reinsurance program, proposing a direct premium subsidy for people buying individual-market coverage and asserting the subsidy would replace reinsurance's roughly 20% effect on underlying rates. "The subsidy is set at 20% because it is meant to replace the effect of the reinsurance program," Wicklund said, adding the plan would be administered by MNsure so consumers see the discount while shopping.

Olivia Bergen, an organizer with Isaiah in Rochester, testified in favor and said reinsurance "has been a $1,000,000,000 giveaway to insurance companies" and that a direct subsidy would deliver relief to Minnesotans rather than to insurers. Stu Lohrey of the Minnesota Farmers Union supported the bill as a way to protect farmers and other seasonal-income households who sometimes migrate between the individual market and Minnesota care year-to-year.

Industry witnesses warned of trade-offs. Dan Andreessen of the Minnesota Council of Health Plans said a program administered through MNsure would require significant IT investment and staffing—MNsure estimated a manual first year and 27.5 FTEs in 2026 rising to 44 in 2029—and that state subsidies count as taxable income on federal returns. Andreessen also said many market participants receive advanced premium tax credits (APTCs), which already respond to rate changes, and that the subsidy as drafted may not replicate reinsurance's market-stabilizing effect for all who benefit today.

Opponents including Matt Flanders (Citizens Council for Health Freedom) said the subsidy would increase taxpayer costs and further entrench MNsure; Flanders cited a fiscal-note projection of $112 million in 2027 rising to $279 million by 2029 in one testimony. Committee members debated funding options; Senator Wicklund introduced an A2 assessment amendment modeled on the governor's proposed assessment but later withdrew it after discussion. The committee adopted an A1 technical amendment and then voted to pass Senate File 10 24 "as amended" and refer it to the Senate Commerce Committee; the clerk recorded a voice vote (aye).

Senators asked the sponsor to clarify off-exchange enrollment treatment and eligibility interactions with APTCs; Wicklund said the intent is to make the subsidy available through MNsure shopping and to preserve access for off-exchange buyers where possible. The committee also discussed federal waiver risk to Minnesota care and the administrative cost of implementing a subsidy through MNsure. The bill was referred to Commerce for further consideration.