Lawmakers agree: Health care's too expensive. But what next?

ST. PAUL, Minn. (FOX 9) - The future of health insurance in Minnesota got a full public airing Wednesday, but lawmakers appear no closer to a resolution about what path to take.

On one side: Gov. Tim Walz and House Democrats, who have proposed a public option allowing people to buy into the state-run MinnesotaCare program. On the other: Senate Republicans, who want to re-up the state’s two-year-old reinsurance program that pays some of the costs to insure people with extremely high medical bills.

The Senate Finance committee approved a three-year extension of the reinsurance program Wednesday, sending the measure to the full Senate despite Democrats’ concerns about the measure. Meanwhile, House Democrats were scheduled to advance a public option bill later in the evening.

The health care issue played a major role on the campaign trail last fall. Walz and Democrats campaigned on the public option, while Republicans said the $542 million reinsurance plan they approved in 2017 as the state’s individual market collapsed would drive down premiums.

“It’s a proven thing. It does work,” state Sen. Gary Dahms, R-Redwood Falls and the lead author of the reinsurance bill, said Wednesday. “Pre-existing conditions are covered. And yet we keep fighting this thing that’s working.”

Premiums on the individual market have dropped by as much as 20 percent under the reinsurance program, according to a state document analyzing the costs of Dahms’ bill.

But federal officials have cut by $100 million their estimate for how much of Minnesota’s costs the federal government will cover. Democrats are raising concerns about the long-term future of the program.

“I really think it’s time that we get serious about deciding what we’re going to do about the insurance situation in Minnesota,” said state Sen. Chris Eaton, DFL-Brooklyn Center.

Walz has proposed replacing the reinsurance system with a series of new programs.

In his two-year state budget proposal, Walz has included a public MinnesotaCare buy-in, a premium subsidy for people who get insurance through the state-run insurance marketplace called MNsure, and a tax credit to ensure Minnesotans on the individual market pay no more than roughly 10 percent of their income on health care.

“Skyrocketing costs for care and prescription drugs keep Minnesotans from getting the care they need,” Walz said Feb. 19, the day he unveiled his budget.

House Democratic leaders are largely in lockstep with the governor over his plan. Wednesday evening, they planned to advance a bill creating the public option, known as OneCare, through the Health and Human Services committee.

But Republicans say a public option would lead to lower reimbursement rates for hospitals and clinics. And they argue that Walz’s subsidy and tax credit plans will cost more and be less effective than reinsurance.

“I am begging the governor to reconsider his stance on reinsurance, and do right by Minnesotans—failure to extend this program would result in higher premiums and throw our individual market back into chaos," state Rep. Greg Davids, R-Preston, said in an emailed statement.