Dayton proposes rebates to ease sting of rising health premiums

DFL Gov. Mark Dayton on Thursday proposed issuing rebates to an estimated 123,000 Minnesotans facing steep health insurance premium hikes but who make too much to qualify for federal tax credits.

Dayton said his primary objective is a fast solution that provides "immediate financial assistance to people" and costs no more than $313 million. That's the amount of the state's roughly $900 million biennial budget surplus that's now earmarked for the so-called rainy-day fund. "If anyone has a better plan, which meets the above three objectives, we are all ears."

Dayton's proposal is the latest to emerge as political leaders react to rates changes announced in early October that will bring premium increases of more than 50 percent from the previous year. Legislative leaders from both parties are putting forward plans they say will address the developing crisis. About 5 percent of state residents purchase health insurance through the individual market.

Dayton's proposal would reduce premiums by 25 percent for individuals or families that qualify.

For a family for four in Rochester, projected monthly premiums for the second-lowest cost plan would be $2,378 before the rebate. Dayton's plan would reduce that cost by $594. For a family of four in the metro area purchasing a similar plan, monthly premiums are projected to be $1,652.

Under the plan, insurers would administer the rebate and would later receive the state funding.

"This is the fastest, most efficient way to keep more money in the pockets of Minnesotans who do not qualify for federal tax credits," Dayton's office said.

House GOP leaders are reviewing Dayton's proposal and are working on their own plan to improve the state's health insurance marketplace.

In a letter to Dayton and other legislative leaders, Rep. Greg Davids, R-Preston, offered his own proposal. Among suggestions that included providing tax credits, Davids said Dayton should immediately seek a one-month extension of the state's open enrollment period from the federal government, making it easier for consumers to enroll.

Dayton said he would look into whether an extension would be viable, calling it a "constructive suggestion."

Senate Majority Leader Tom Bakk, DFL-Cook, said he met with House Speaker Kurt Daudt, R-Crown, Thursday to discuss "the tax rebate and tax credit proposals, as well as options to pay for them."

The two leaders also talked about how to address the enrollment caps in counties where some face fewer options for insurance, according to the statement. "I applaud the governor for initiating this proposal and look forward to agreeing on a solution quickly," Bakk said.

In recent days, legislative leaders have considered various options to reform the individual health insurance market, possibly in an emergency legislative session.

Dayton said last week that if legislators can agree on a plan by Nov. 1, he would call lawmakers to St. Paul for a special session, most likely after the Nov. 8 election.

"We understand that people are angry and frustrated about the high premiums that will affect nearly 250,000 Minnesotans who buy health insurance on their own," said Jim Schowalter, president of the Minnesota Council of Health Plans, a trade group representing insurers.

He encouraged consumers to go to MNsure.org and find out if they qualify for federal help now to reduce monthly premiums. Before going to the council, Schowalter was Dayton's budget commissioner.

Dayton and House Republicans have traded barbs in recent days over the health care law ahead of the Nov. 8 election.

The partisan clash is steeped in election-year politics, with all 201 legislative seats on the ballot and control of the House and Senate in the balance. Daudt is trying to build on his slim majority in the House, while Dayton is trying to help DFLers win control of the chamber, giving them full control at the Capitol for his final two years in office.

Dayton offered a full-throated defense of President Obama's signature health care law. "The politicians who want to eliminate the Affordable Care Act, rather than improve it, fail to offer any comprehensive alternative to it," Dayton said, adding: "We're gonna make this work as well as possible."

Ricardo Lopez • 651-925-5044