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Our View: It's early, but 'reinsurance' showing promise

Minnesota lawmakers took a big risk last session with "reinsurance," a program providing about $500 million from state and federal sources to insurance companies to help them offset covering their highest-cost patients. The goal was stabilizing Minnesota's insurance market while lowering health premiums. It was risky because insurance companies were to receive the public dollars — lots and lots of public dollars — without being obligated to actually lower rates, or do anything else really, in return.

The gamble now appears to be paying off, however.

The Minnesota Department of Commerce announced this week that reinsurance will reduce premiums next year by about 20 percent, on average, from what they would have been without reinsurance. The result: Most individual insurance premiums will remain about the same in the coming year.

"After two years of large rate increases in the individual market, a new state reinsurance program will help stabilize rates for Minnesotans who buy their own coverage in 2018," the department said in announcing 2018 rates for individual and small group health plans purchased through MNsure, insurance agents or insurance companies directly. This is outside of employer- and government-funded health plans.

While market stabilization in Minnesota can be cheered — the Associated Press called the announcement of the 2018 rates "a welcome change after years of double-digit premium hikes and concern that the state's entire individual market was on the brink of collapse" — enthusiasm also can be tempered.

"While recent state actions helped to stabilize the individual market, too many Minnesotans are still paying too much for the coverage they need," Minnesota Commerce Commissioner Mike Rothman cautioned. "The individual market survived a near-fatal crisis last year, but its recovery is still very tentative. Federal and state policymakers must address health care costs to ensure that Minnesotans have access to affordable, comprehensive health coverage."

Want more good news/tempered good news? While the administration of President Donald Trump approved Minnesota's reinsurance program with $323 million in federal funding over two years, it cut federal funds for MinnesotaCare by $369 million at the same time. Gov. Mark Dayton and others immediately called on D.C. to spare MinnesotaCare, the state health care program that since 1992 has been offering coverage to low-income Minnesotans who make too much to qualify for Medical Assistance.

Open enrollment for MNsure begins Nov. 1. While reinsurance may be showing early promise in stabilizing Minnesota's markets, and while Minnesotans who buy health coverage on their own should see only slight rate increases in the coming year, and even some lower rates, lawmakers in both D.C. and St. Paul clearly have more work to do — and it may mean taking more risk.