Dayton offers proposal for 25 percent reduction in health insurance premiums

ST. PAUL -- Minnesotans who buy individual health insurance policies would get either state or federal aid to deal with soaring premiums under a plan Gov. Mark Dayton offered Thursday.


ST. PAUL - Minnesotans who buy individual health insurance policies would get either state or federal aid to deal with soaring premiums under a plan Gov. Mark Dayton offered Thursday.

Dayton announced a proposal that would reduce premiums 25 percent for 123,000 Minnesotans who do not qualify for federal assistance provided to Americans below specific income levels.

The governor said he would like lawmakers to give it, or another plan, their unofficial endorsement by the time people start buying plans Tuesday. But even if there is no agreement by then, he said that he would like to have a deal soon so he could call a special legislative session to enact changes after the Nov. 8 election.

About 250,000 or 5 percent of Minnesotans buy policies on the individual market, but the vast majority of residents are served by employer-supplied policies or are in government-funded programs. About 123,000 of those shopping the individual market would be eligible for the 25 percent premium reductions and the rest could get federal aid or buy state-subsidized insurance through MinnesotaCare, Dayton said.

The governor's plan would not affect those receiving government or employer coverage.


In the weeks since Commerce Commissioner Mike Rothman announced average health insurance rates for individual policies would rise 50 percent to 67 percent, many Minnesotans began to worry that they will not be able to afford health insurance in 2017, will have policies that would not pay for them to continue using their own doctors and see deductibles climb thousands of dollars annually.

Dayton's plan does not deal with deductibles or limitations on what doctors can be used in some of the 2017 policies.

He said he and aides meet Friday morning with a representative of state health insurers to see if they can administer the plan.

The Dayton plan is meant to deal only with immediate needs. Rothman, for one, has said major changes are needed to attract any insurance companies to the individual market for 2018 and other reforms are needed to keep premiums affordable.

The governor suggests using $313 million that was to go to the state budget reserve to fund the premium reductions.

"That state assistance would, in most cases, greatly reduce their 2017 price increases," Dayton said.

An example Dayton's office released was for a 55-year-old Duluth resident who would pay $775 a month for the second-lowest cost plan out of four offered. The Dayton plan would reduce that to $581. The same person in Rochester would pay $968 monthly without the plan, but $726 with it.

The governor said 100,000 Minnesotans are eligible for federal assistance, but have not applied for it. No one will get both state and federal premium assistance under the Dayton plan.


Senate Majority Leader Tom Bakk, D-Cook, applauded Dayton's efforts "for initiating this proposal and look forward to agreeing on a solution quickly."

While Bakk said he and House Speaker Kurt Daudt, R-Crown, met about the issue Thursday, there was no indication of an agreement.

Dayton praised Rep. Greg Davids, R-Preston, for suggesting that the state seek federal approval to extend the time Minnesotans may purchase individual policies until the end of January. Davids also suggested a variation of the premium reduction plan Dayton offered.


Minnesotans may check on health insurance plan costs, and whether they are eligible for federal assistance, at .

Related Topics: GREG DAVIDS
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