Health Insurance Relief a Challenge for Minnesota Lawmakers

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Minnesota lawmakers scrambled on Jan. 10 to begin cobbling together a relief plan for residents facing massive health insurance premium hikes, but logistical hurdles and disagreements between the Republican-controlled Legislature and Democratic Gov. Mark Dayton could make it weeks or longer before checks are delivered.

Minnesota is grappling with some of the largest rate increases in the nation for 2017, driven by higher-than-expected medical costs from a small, severely sick population in the individual market — where residents who aren’t covered through employers or by public programs such as Medical Assistance get coverage. The Legislature kicked off 2017’s session focused squarely on tackling the 50 percent to 67 percent premium hikes on the individual market after talk of a special session fizzled out last month.

The end of open enrollment Jan. 31 brings a new deadline to offer an estimated 100,000 people affected by the increases an assurance that help is on the way. Committees in both the House and Senate approved a package that would help cut total monthly premiums by up to 30 percent, aiming to get a bill on Dayton’s desk as soon as next week. But first they need to resolve a standoff over how to craft that approach to help residents like Karen Laumb.

Laumb, a thyroid cancer survivor, urged lawmakers to act quickly to help not only reduce her premiums but restore her ability to see her doctors, who she had to stop seeing with the New Year after her plan was switched. She’s scared she’s facing “financial ruin” and worries 2017 will be the last year she can continue running her own health care consulting business due to outsized health insurance costs.

“I really worry what 2018 will look like for me,” Laumb said.

Laumb is one of many targeted by the relief effort: She’s paying the full increase because she makes too much to get federal subsidies available through the state’s insurance exchange, MNsure.

The GOP’s plan would dole out nearly $300 million in state support based upon income — a 30 percent cut to monthly premiums for families making three times the poverty level, while those making more would see a reduction of 25 percent or less. The relief would be capped for those making eight times the poverty level.

But that setup would require new programs to check income, verify insurance coverage and more, which Dayton’s administration has criticized as too cumbersome, suggesting it may cost up to $20 million to implement and take an entire year to launch and begin delivering checks. Department of Revenue Commissioner Cynthia Bauerly also said the relief checks outlined in the GOP plan could ultimately be taxed by the federal government, though how large a tax bill those residents would face is unclear.

“This process creates red tape and delays,” Minnesota Management and Budget Commissioner Myron Frans told a House committee Tuesday.

Dayton’s proposal would route the same $300 million sum directly to health insurance companies, buying down premiums for all qualifying shoppers by 25 percent, regardless of income.

Sen. Michelle Benson, a top Senate Republican on health care issues, said the large sum of money warrants some extra verification but said she’d work with Dayton’s administration to fine-tune the method.