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 state’s top insurance regulator said the Minnesota market was “on the verge of collapse.”
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, the chief executive of Minnesota’s state-run insurance marketplace. “Health plans are very happy about it.”
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.
But the program will be invisible to consumers. They will not have to file additional paperwork or do anything different from what they would ordinarily do.
“Reinsurance is keeping rates under control and keeping insurers in the market in counties and places where they might not otherwise participate,” said State Senator Michelle R. Benson, a Republican who is chairwoman of the Senate health and human services committee.
