Extending reinsurance program would give many residents a break

Three years ago, Minnesota's individual health insurance market was on the brink of collapse. Premiums were skyrocketing, and there were serious doubts about whether the market would be available for the thousands of Minnesota farmers, small-business owners, and others who rely on the individual market to get their health care.

In 2017, the Legislature rolled up its sleeves and got to work. Thanks to several Republican-led reforms, premium rates are falling, more insurers and plan options are coming into the marketplace, and the market has stabilized.

Our reinsurance program has been held up as a national model that other states are implementing. It's been implemented in Republican-led states, and hailed even by our Democratic U.S. Sen. Amy Klobuchar. Why? Because it works.

This year, Minnesota can extend this wildly successful program at no additional cost to the state. Gov. Tim Walz's administration projects this will lower premiums 20 percent for the next three years, saving Minnesotans money on their monthly health premiums and ensuring continued stability for the market.

Market stability is absolutely critical to give policymakers the opportunity to work on bipartisan, long-term solutions that will lower the cost of care. We can't make the changes we need to our health care system if we go back to the days of skyrocketing costs and a market near the brink of collapse.

Instead of embracing this wildly successful program, Democrats are backing a nonsensical plan that would cause health care costs to skyrocket, help fewer people, and once again threaten the existence of the individual market in Minnesota.

Walz has proposed a 20 percent subsidy to reduce health care premiums. This sounds well and good, until you consider that by some estimates, premiums would skyrocket 50 percent if reinsurance goes away. Even with the 20 percent subsidy, Minnesotans would still pay more.

What's worse, the governor's plan would help only a fraction of the individual market, and would cost the state more than extending reinsurance. He claims his plan would cut out the middleman, but it involves literally cutting a check to insurance companies — the same complaint currently being made about reinsurance.

Let's be clear: reinsurance is a reimbursement program directly tied to expensive claims filed by Minnesotans. It helps spread risk and brings down costs for every single person on the market. Anyone who opposes it because they incorrectly think it's a handout to insurance companies should have to explain to the tens of thousands of Minnesotans on the individual market why their bills are going to go up this fall if we don't pass reinsurance.

The governor needs to understand: Minnesota simply can't afford not to extend reinsurance. It would hurt families who have been struggling for years with higher costs and unaffordable deductibles. He needs to listen to the reasonable people in his own party who have set aside their partisan ideologies and embraced this idea because they know it works.

If those voices aren't enough to convince him, perhaps some simple math will help:

Reinsurance will help families save more on their premiums than the governor's plan; reinsurance will drop rates by 20 percent. His plan would drop rates by 20 percent — after a substantial premium increase.

Reinsurance is cheaper for Minnesota taxpayers than the governor's plan; reinsurance would cost just $54 million in state money next year — money that has already been set aside. His plan would cost $185 million in 2020 alone.

Reinsurance will help more people than the governor's plan; reinsurance would help all 160,000 Minnesotans in the individual market. His plan would help only the 80,000 people who don't receive federal tax credits.

Minnesotans need our help. They can't afford another year of double-digit premium increases. Let's do the right thing and continue our nation-leading program for another three years.

Greg Davids, R-Preston, is a member of the Minnesota House.