Dayton, GOP legislators strike deal on insurance rebates

About 125,000 Minnesotans who face surging health insurance premiums can expect rebates funded by the state soon, thanks to a compromise finalized Wednesday between Gov. Mark Dayton and Republicans who control the Legislature.

The $326 million rebate plan has been the chief focus of activity at the State Capitol since lawmakers convened at the beginning of January. If the House and Senate pass it on Thursday as expected, Gov. Mark Dayton said he will sign it — giving both the DFL governor and Republican legislative majorities a bipartisan accomplishment early in the five-month legislative session.

The measure would provide a 25 percent discount to people who buy insurance on the individual market but do not receive federal subsidies. People in that group have seen their premiums rise by 50 percent or more this year. If the bill is signed this week, lawmakers said eligible insurance customers will likely start seeing the discounts on their bills by March or April. They'll also get retroactive rebates for the first few months of the year.

The deal includes $15 million to help cover health insurance costs for people with any of a specific list of serious conditions who lose their coverage. It also makes a handful of other changes to health care laws, such as allowing for-profit health maintenance organizations (HMOs) to operate in Minnesota and setting up a health care cooperative for farmers.

"We hope this really sends the signal that if you're in the individual market, we're moving this as fast as we can to the governor's desk," said Sen. Michelle Benson, R-Ham Lake, a chief architect of the legislation.

Benson said she's pleased to see both parties come to an agreement so people can meet deadlines to sign up for insurance coverage. Lawmakers have worried that people are waiting to buy health care coverage because they're uncertain whether the state will step in to lower their bills.

The agreement followed months of heated debate between Republicans and DFLers. Since the premium hikes were announced last September, members of both parties said it was a priority to provide relief and stabilize the state's individual health care market.

But they sparred over who should qualify for the help, what agency would sort out the premium discounts or rebates and whether other health care measures should be included. Those debates prevented the Legislature from taking up the issue in a special session in the final weeks of 2016, and the back-and-forth dominated much of the first few weeks of the 2017 session.

Ultimately, lawmakers signed off on Dayton's relief plan. House Speaker Kurt Daudt said he was willing to compromise to move the deal forward. The governor, meanwhile, agreed to compromise on his initial goal of passing a bill that was focused solely on premium relief. He indicated that he would support the bill after lawmakers agreed to drop a "reinsurance" provision and another Republican proposal that sparked controversy: allowing insurance companies to offer plans that do not cover a variety of conditions, including cancer and diabetes.

Sen. Melisa Franzen, DFL-Edina, who served on the conference committee for the bill, noted that she was glad to see some of the more controversial provisions of the initial proposals dropped. She said she's still wary of some of provisions but believes moving it forward is the right thing for the state.

"That's the spirit of compromise," she said. "We're here today to do what the people of Minnesota want us to do."

Erin Golden • 612-673-4790