Insurers are in driver's seat on state health 'reinsurance'

The tight mid-session deadline, the complexity of health care and uncertainty over congressional moves to repeal the Affordable Care Act put the Minnesota Legislature in a tough spot when it comes to passing reforms to stabilize the state's 2018 individual health insurance market.

The measures rushed through both chambers that are currently before a conference committee reflect that grim reality. This is "reform" only an insurance executive could love. Essentially, both House and Senate proposals boil down to paying out vast sums — $384 million or $600 million, respectively, over the next two years — to help pay for insurers' high-cost enrollees. After that? Hope for the best.

As Gov. Mark Dayton has astutely noted, there are no guarantees from insurers at this point about how much consumer costs will come down. Or whether insurers will increase the number of plans they offer across the state.

At best, this reinsurance plan is an expensive Band-Aid that precipitously draws down a state fund designated to help low-income Minnesotans access medical care. This funding mechanism and the sums involved are not sustainable and reflect the limited options available to lawmakers under severe time constraints — the need to meet insurers' deadlines for setting individual market rates for next fall's 2018 open enrollment offerings. That had to be done by the end of March, according to the industry. Open enrollment is the period when individuals buy yearly insurance plans for the coming year.

About 5 percent of Minnesotans buy their coverage through the individual market because they don't get coverage through employers or through public programs such as Medicare or Medicaid. Premiums have soared in Minnesota's individual market for a number of reasons — among them, that Congress cut federal dollars designed to offset insurers' losses — and one major insurer has already exited this narrow marketplace. Minnesota legislators have to act, which is why this unsatisfying legislation has to be enacted.

But the conference committee composed of House and Senate health care leaders must improve upon the reinsurance measures as they reconcile the different chambers' version of the legislation. If the state is going to do this, then make sure funding is adequate to make a real dent in consumers' monthly premiums, a position that would favor the more robustly funded Senate version. (The premise of "reinsurance" is that it provides taxpayer dollars to help insurers pay for enrollees with high-cost, ongoing medical needs. In turn, this reduces consumers' monthly bills because fewer premium dollars are needed to pay for these high-cost patients.)

The conference committee should resist other measures to reduce other consumer health insurance protections and ensure that the board charged with reinsurance oversight is not stacked in the industry's favor. Right now, there are legitimate concerns about the board's makeup under both chambers' versions.

In addition, the committee should follow Dayton's lead and press insurers for more specific guarantees on premium reductions and plan offerings. If those guarantees are not provided, then conference committee members should include a provision that allows consumers to buy into the state-run MinnesotaCare plan if there are no insurance offerings in their counties.

It's imperative that legislators recognize that their work is not done when reinsurance legislation passes. Innovation is sorely needed to find long-term reforms that are sustainable and guided by what's best for consumers, not what's best for insurance companies. Insurers were clearly in the driver's seat this session. That should not be a permanent spot.