Lawmakers weigh funding options as Minnesota reinsurance program nears expiration

The Minnesota House Commerce Committee on Wednesday heard more than an hour of testimony on proposals to fund the state's reinsurance program, known as the Minnesota Premium Security Plan, which officials say could leave individual-market premiums 25% higher if funding lapses.

Deputy Commissioner of Insurance Julia Dreyer told the committee the program's reserves will be exhausted without legislative action and warned of broad effects if the program lapses. "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 on the individual market," Dreyer said.

The hearing reviewed the governor's funding proposal and alternatives. The governor's plan would create a roughly 2% assessment on health insurers, administered by the Minnesota Comprehensive Health Association (MCHA), to provide a stable state match that draws federal pass-through funds under the state's Section 1332 waiver. Dreyer said the assessment would apply broadly to carriers writing health products and that MCHA would continue to administer the reinsurance payments.

Why it matters: Minnesota's reinsurance program reimburses a portion of very large…