Program slows soaring health premiums for 2018

MINNEAPOLIS — Last fall, as consumers in Minnesota were facing health insurance rate increases of 50 percent or more, Gov. Mark Dayton, a Democrat, said the Affordable Care Act was “no longer affordable to increasing numbers of people.”

The outlook now is much better. Rate increases requested for 2018 are relatively modest, thanks in part to a new program under which the state will help pay the largest claims. The program, known as reinsurance, and the efforts that led to its creation hold lessons for other states where rates are rising rapidly, and for Congress, where lawmakers are considering the introduction of a similar program.

“The individual insurance market is stabilizing under the program here,” said Allison L. O’Toole, chief executive of Minnesota’s state-run insurance marketplace.

State officials and insurers say that, as a result of the program, premiums next year will be about 20 percent lower than they would otherwise have been.

The program — for which Minnesota has budgeted about $270 million in each of the next two years — potentially benefits all of the 160,000 people buying insurance on their own, not just those with large claims. Consumers will not have to file additional paperwork.

In Washington, Congress returns Tuesday facing decisions about the future of the Affordable Care Act.

The Senate health committee, headed by Sen. Lamar Alexander, R-Tenn., has scheduled four hearings in the first half of September to consider bipartisan proposals to steady insurance markets. A group of eight governors has suggested a package of quick fixes, including federal funds for reinsurance programs.

Minnesota’s experience with such an effort is instructive. The bill creating its reinsurance program, the Minnesota Premium Security Plan, became law within three months of being introduced.

The Minnesota plan was a Republican initiative. Most Democrats voted against the bill, and Dayton allowed it to become law without his signature. Many Democrats preferred a different approach that would have allowed consumers to buy coverage under an existing state program.

But now that the reinsurance program has been authorized by state law, members of Congress from Minnesota and state legislative leaders from both parties have joined Dayton in urging the Trump administration to grant the approvals the state needs to carry out the plan.

In a letter to governors in March, Tom Price, the secretary of health and human services, said the Trump administration would be receptive to such state initiatives.