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Minnesota health insurance marketplace 2022 guide

State-run exchange – MNsure – has five carriers offering plans for 2022

Minnesota exchange overview

Minnesota’s state-run exchange, MNsure, has five carriers offering plans for 2022. Average full-price premiums increased by about 9.5% for 2022, driven in part by changes to the state’s reinsurance program. But American Rescue Plan subsidies make coverage more affordable than it was during the open enrollment period in the fall of 2020.

Frequently asked questions about Minnesota's ACA marketplace

Minnesota has a state-run health insurance marketplace/exchange, MNsure.

On May 9, 2017, lawmakers in Minnesota passed SF800, an omnibus health and human services bill. Among many other things, the legislation called for switching from MNsure to the federally-run marketplace (HealthCare.gov) starting in 2019 (see Section 5). But Governor Dayton vetoed it.

Allison O’Toole, who led MNsure as CEO for three years, announced her resignation in March 2018, and the exchange named Nate Clark, the MNsure COO, as acting CEO. A few months later, the MNsure board named Clark as the permanent CEO. O’Toole left MNsure to work as director of state affairs for United States of Care, a non-profit created by Andy Slavitt, who was the acting administrator of CMS under the Obama Administration.

Minnesota is also one of just two states in the country with a Basic Health Program (New York also has one). Minnesota’s BHP, called MinnesotaCare, provides comprehensive, low-cost coverage to people with income up to 200% of the poverty level. For most enrollees, there is no premium, although enrollees with income of at least 160% of the poverty level do pay modest monthly premiums for MinnesotaCare coverage.

The existence of MinnesotaCare is the reason that a smaller-than-average percentage of MNsure’s private plan enrollees qualify for premium subsidies and cost-sharing reductions; many of the people who would qualify for those benefits in other states are instead eligible for MinnesotaCare if they live in Minnesota.

In November 2021, CMS announced that MinnesotaCare would get an additional $100 million in federal funding as a result of the American Rescue Plan.

The open enrollment period for 2022 coverage ran from November 1, 2021 to January 15, 2022. Outside of open enrollment, a qualifying event is necessary to enroll or make changes to your coverage.

There are five insurers that offer exchange plans in Minnesota. Quartz was new for 2021, and all five insurers have continued to offer coverage for 2022. Most counties in Minnesota have at least three insurers offering exchange plans for 2022, although there are seven counties that have just two insurers that offer plans through MNsure.

The following insurers offer plans in the Minnesota exchange, with plan availability varying from one location to another:

  • Blue Plus
  • Group Health
  • Medica
  • UCare
  • Quartz

PreferredOne also offers individual/family coverage in Minnesota, but only outside the exchange (ie, their plans are not available through MNsure).

2014: Five insurers offered individual policies through MNsure for 2014: Blue Cross Blue Shield of Minnesota, HealthPartners/Group Health, Medica, PreferredOne, and UCare. Kaiser Health News reported that Minnesota offered some of the lowest premiums for silver (mid-level) plans in the U.S. Four of Minnesota’s nine regions made Kaiser’s list of the 10 least expensive places to buy health insurance.

2015: But PreferredOne, which offered the lowest rates in the nation in 2014 and captured a large portion of 2014 enrollees, withdrew from MNsure for 2015. PreferredOne said remaining on the exchange was “not administratively and financially sustainable.” A Star Tribune business writer attributed PreferredOne’s departure as a market dynamics issue rather than a problem with MNsure.

However, Blue Plus (an affiliate of Blue Cross Blue Shield of MN, offering HMO plans) joined the exchange for 2015, so there were still five insurers offering plans for 2015: Blue Cross Blue Shield of Minnesota, Blue Plus, Health Partners/Group Health, Medica, and UCare. MNsure offered 84 plans statewide, up from 78 for 2014.

2016: BCBSMN, Blue Plus, Health Partners/Group Health, Medica, and UCare offered individual market plans through MNsure for 2016.

2017: In an effort to recruit more carriers to offer plans through MNsure for 2017 — particularly outside the Twin Cities metro area — state regulators sent out a request for proposals from health insurers on August 15, 2016. Regulators noted that insurers could propose waivers of regulations in order to make it feasible for them to offer coverage through MNsure, although any such waiver requests would have to be approved by regulators.

Steven Parente, a health insurance expert at the University of Minnesota, called the state’s effort to recruit insurers to MNsure a “distress call” and noted that August 15 is awfully late in the year to be putting out a request for insurer participation, given that open enrollment begins November 1. And ultimately, no new insurers opted to join MNsure for 2017.

Blue Cross Blue Shield of MN dropped their individual market PPO plans at the end of 2016 due to significant financial losses. That left Blue Plus (which offered HMOs and covered roughly 13,000 people in 2016 in the individual market) as the only BCBSMN affiliate in the exchange. Roughly 103,000 people had to select new plans during open enrollment.

Most of those BCBSMN enrollees had off-exchange coverage, though. There were only about 20,400 MNsure enrollees (a little more than one in five MNsure enrollees) with coverage under BCBSMN who needed to switch to another plan during open enrollment. BCBSMN had individual PPO options available in all 87 counties in Minnesota through MNsure in 2016, while the Blue Plus coverage area — comprised of four separate HMO networks — was available in 77 of the state’s counties.

Nationwide, carriers have been shifting away from PPOs and towards HMOs and EPOs (although that trend has started to reverse a bit as of 2022). In Colorado, Anthem Blue Cross Blue Shield also dropped their PPOs at the end of 2016. In Indiana, there were no PPOs available in the individual market by 2017. Blue Cross Blue Shield of New Mexico dropped all of their individual market plans at the end of 2015 except one off-exchange HMO. Blue Cross Blue Shield of Texas dropped their individual market PPO plans at the end of 2015.

Minnesota does still have PPO options available, however. There are PPOs offered by Blue Cross Blue Shield of Minnesota and HealthPartners for 2021.

All of the MNsure carriers except Blue Plus also limited their total enrollment for 2017. By November 11, 2016, less than two weeks into open enrollment for 2017 coverage, Medica had hit their 50,000 member enrollment cap for 2017 (including on and off-exchange enrollments, and also accounting for expected renewals of 2016 Medica plans), and their policies were no longer available in the individual market in Minnesota, on or off-exchange. The only exception was five counties (Benton, Crow Wing, Mille Lacs, Morrison, and Stearns) where Medica agreed not to limit enrollment, as all of the other available carriers in those counties have imposed enrollment caps too. In those five counties, Medica plans continued to be available.

At that point, Medica’s market share in MNsure for 2017 stood at 34.2%. By December 14, Medica’s market share had dropped to 27.7%, as enrollments had continued to climb for the remaining carriers.

On January 31, Medica re-opened enrollment for 2017. This was because a smaller-than-expected number of 2016 Medica enrollees renewed their plans for 2017, meaning that the carrier still had some wiggle room under their 50,000 member cap; at that point, they had room for about 7,000 more enrollees. Medica plans were thus available throughout the duration of the special enrollment period that was added on at the end of open enrollment, and continued to be available for people with qualifying events.

2018: Plans continued to be available from Blue Plus, Health Partners/Group Health (GHI), Medica, UCare. In the months before a decision was reached regarding an extension of the open enrollment window for 2018 plans (the first year that the federal government imposed a shorter, month-and-a-half enrollment window), two of MNsure’s participating insurers had differing positions: UCare believed the exchange should add an additional two-week special enrollment period, while Medica did not want the exchange to have the option to extend the newly-scheduled six-week enrollment window. Notably, Medica capped their enrollment very early during the 2017 open enrollment period, and while UCare also had an enrollment cap, it was set with a target of nearly doubling their 2016 enrollment. But Medica is the only MNsure insurer that didn’t set an enrollment cap for 2018.

As was the case for 2017, enrollment caps were used in the individual market in Minnesota for 2018 by all insurers other than Medica (Medica did have an enrollment cap for 2017, which they hit very early in open enrollment; however, they resumed enrollments at the end of January 2017). Details about the insurers’ enrollment caps are in the plan binders in SERFF. But MNsure confirmed in May 2018 that none of their insurers had hit their enrollment caps for 2018.

2019 and 2020: Blue Plus, Health Partners/Group Health, UCare, and Medica have continued to offer plans through MNsure, and all of them continued to participate in 2020 as well. Blue Plus expanded to once again offer statewide coverage in 2020, for the first time since 2016.

2021: Quartz joined the exchange for 2021, joining the four existing insurers. HealthPartners and UCare both expanded their coverage areas for 2021.

Average premiums in Minnesota’s individual/family market increased by 9.5% for 2022, with the following average rate changes for each insurer:

  • Blue Plus: 7.39% increase
  • Group Health/Health Partners (GHI): 9.52% increase
  • Medica: 8.96% increase
  • UCare: 11.33% increase
  • Quartz: 4.31% increase

PreferredOne Insurance Company, which offers plans outside the exchange, increased premiums by 7.1% for 2022.

As noted above, the changes in the reinsurance program are part of the reason for the larger-than-average rate increases in Minnesota. But it’s important to note that premium subsidies grow to keep pace with the cost of the benchmark plan in each area. And the American Rescue Plan has boosted subsidies quite a bit, compared with the assistance that was available in the fall of 2020.

As of early 2021, only half of MNsure enrollees were receiving premium subsidies. This was far lower than the national average of 86%, but that’s because Minnesota’s Basic Health Program (MinnesotaCare, described in more detail below) covers people with income up to 200% of the poverty level. In most other states, people with income too high for Medicaid but not more than 200% of the poverty level account for a significant portion of subsidy-eligible enrollees. But in Minnesota, these enrollees have MinnesotaCare instead of a private health plan in the exchange.

And the American Rescue Plan has made more people eligible for subsidies, due to the elimination of the income cap for subsidy eligibility (this applies through the end of 2022, and the Build Back Better Act would extend it through 2025). So although full-price premiums have increased by an average of nearly 10% in Minnesota for 2022, the majority of people who get their coverage through MNsure will receive subsidies that make their coverage more affordable.

For perspective, here’s a look at how premiums have changed in Minnesota’s exchange over the years:

  • 2015: Average increase of 4.5%. But some characterized the official announcement as misleading as it failed to take into account low-cost 2014 plans from PreferredOne. Consumers who bought a PreferredOne plan through MNsure for 2014 could only renew their policies for 2015 by working directly with the insurer, since PreferredOne stopped offering plans in the exchange at the end of 2014. However, PreferredOne rates went up an average of 63%, and consumers didn’t qualify for subsidies if they shopped outside the exchange.
  • 2016: Average increase of 41.4% for the individual market, and about 38.5% for plans sold in MNsure (ie, not counting PreferredOne). Approved rates for 2016 were announced on October 1, 2015, ranging from about 15% for Medica to 49% for Blue Cross Blue Shield of Minnesota. In general, the carriers cited higher-than-expected claims costs over the past year, along with the impending phase-out of the ACA’s federal reinsurance program as justification for their 2016 rate requests. But Governor Mark Dayton called some of the higher proposed increases “outrageous,” and promised a rigorous review of the filed rate changes and justifications.  Ultimately, regulators were able to limit the highest rate increases a bit, but the final weighted average rate increase in the individual market in Minnesota still ended up being the highest in the nation for 2016. But Minnesota still had the lowest overall premiums in the upper Midwest, as their premiums had been the lowest in the country in 2014 and 2015.
  • 2017: Average rate increase of 56.6%: When the Minnesota Department of Commerce announced health insurance rates for 2017, the individual market was “experiencing serious disruptions in 2017” and “on the verge of collapse.” The four carriers that offered plans through MNsure had average rate increases that ranged from 50% to 67% for 2017. And amid mounting losses and the departure of BCBSMN from the exchange, three of the remaining insurers implemented enrollment caps for 2017. The enrollment caps that HealthPartners, Medica, and UCare employed for 2017 were approved as part of the rate review process, and were designed to protect carriers from further financial losses as they absorbed BCBSMN’s enrollees (Blue Plus, the HMO affiliate of BCBSMN, remained in the exchange).
  • 2018: Average rate decrease of 5.3%. Final rates for 2018 were approved in October 2017, based on the Minnesota Premium Security Plan (MSPS, the state’s reinsurance program) being implemented but cost-sharing reductions (CSR) not being funded by the federal government (the cost of CSRs was added to on-exchange Silver plans). MNsure had indicated that if the reinsurance program had not been approved, 2018 rates would have been about 20% higher than they ended up being. With the reinsurance program approved, three of the four MNsure insurers decreased their average premiums for 2018. But some enrollees who don’t get ACA premium subsidies still experienced a rate increase, due to the termination of the one-year, state-funded 25% premium rebates at the end of 2017.
  • 2019: Average premium decrease of 12.4%. Average premiums dropped for all five insurers in the individual market in 2019. This was the second year in a row of declining rates in Minnesota, and the first year that all five insurers decreased their average rates. Minnesota insurance regulators noted that rates in 2019 were about 20% lower than they would have been without the reinsurance program. But most of Minnesota’s insurers charged higher rates in 2019 than they would have if the individual mandate penalty hadn’t been eliminated, and if access to short-term plans and association health plans hadn’t been expanded by the Trump administration. For example, UCare’s rate filing notes that while average rates were decreasing by about 10%, the rate decrease would have been nearly 15% if the individual mandate penalty had remained in place.
  • 2020: Average premium decrease of 1%. Four of the five insurers (including PreferredOne, which only offers coverage off-exchange) in Minnesota’s individual market decreased their average premiums for 2020. This was the third year in a row that average individual market premiums dropped in Minnesota’s individual market, due in large part to the reinsurance program. UCare’s rates increased slightly for 2020, but the other three MNsure insurers all implemented small rate decreases, and PreferredOne, which still only offers plans outside the exchange, reduced their rates by an average of 20%.
  • 2021: Average rate increase of 2%. For 2021, Quartz joined the Minnesota marketplace. Quartz already offered plans in Illinois and Wisconsin, and expanded into Minnesota for 2021. And two of the existing insurers — HealthPartners and UCare — expanded their coverage areas for 2021 (BluePlus and Medica already offered coverage statewide, and continue to do so in 2021). The average rate changes that were approved for MNsure’s insurers ranged from an increase of under 0.7% to an increase of about 4.2%.

From 2014 through 2018, enrollment in MNsure’s individual market plans increased every year, reaching 116,358 people by 2018. Enrollment dropped for the first time in 2019, when 113,552 people enrolled in individual market plans through MNsure. In most states that use HealthCare.gov, enrollment peaked in 2016. But MNsure’s drop-off in 2019, which amounted to only a 2.4 percent reduction in enrollment, is the only time year-over-year enrollment has declined. Notably, the ACA’s individual mandate penalty was eliminated as of 2019, and regulations that the Trump administration implemented in late 2018 now make it more feasible for healthy people to use short-term plans instead of ACA-compliant plans (Minnesota has its own rules for short-term plans, but they’re more relaxed than the Obama-era federal rules that applied in 2017 and most of 2018).

For 2020, enrollment grew again, reaching a record high of 117,520 enrollees. And another record high was reached during the open enrollment period for 2021 coverage, when 122,269 people signed up for private coverage (in addition to 33,111 people who enrolled in Medicaid or MinnesotaCare, both of which have year-round enrollment).

Here’s a look at the number of people who have signed up for individual market plans through MNsure during each year’s open enrollment period:

  • 2014: 48,495 people enrolled
  • 2015: 59,704 people enrolled
  • 2016: 83,507 people enrolled
  • 2017: 109,974 people enrolled
  • 2018: 116,358 people enrolled
  • 2019: 113,552 people enrolled
  • 2020: 117,520 people enrolled
  • 2021: 122,269 people enrolled (plus an additional 12,700 who enrolled by July 12 during the special enrollment period that ended July 16)

These numbers all represent total enrollment at the end of open enrollment. Effectuated enrollment is always lower, and MNsure provides periodic effectuated enrollment data on their board meeting materials page. It’s also worth noting that the enrollment numbers reported by CMS are always lower than the numbers reported in MNsure’s press releases (for example,CMS reported an official enrollment total of 110,042 enrollees for 2020, whereas MNsure reported 117,520).

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Reinsurance program extended through 2022, but with a change in coinsurance

Minnesota’s rate increases for 2022 are among the largest in the nation; the national average rate increase is about 3.5%, versus 9.5% in Minnesota. A big part of the reason for the larger-than-average rate increases is the change in the state’s reinsurance program for 2022.

The reinsurance program, explained in greater detail below, took effect in 2017 and resulted in three consecutive years of average rate decreases, had initially been scheduled to end at the end of 2021. That would have resulted in substantial rate increases for 2022 (Group Health, for example, had initially proposed an average rate increase of nearly 31%, based largely on the impending termination of the reinsurance program; details are available on ratereview.healthcare.gov).

But HF33, which was enacted in late June 2021, extended the reinsurance program for one additional year, through the end of 2022. However, it also reduced the coinsurance percentage from 80% to 60%. That means that once a claim reaches $50,000, the reinsurance program will start to cover 60% of it, as opposed to the 80% that was covered in previous years (the cap remains at $250,000).

This results in less reinsurance funding for insurers, and thus higher premiums in 2022. But the premium increases are much smaller than they would have been if the reinsurance program had been allowed to expire.

Most enrollees receive premium subsidies (premium tax credits) that cover the majority of their premium costs. And subsidies grow to keep pace with the benchmark premium in each area.

Minnesota Premium Security Plan: 1332 waiver proposal approved by CMS, but with a significant funding cut for MinnesotaCare

In May 2017, Minnesota Governor Mark Dayton submitted a 1332 waiver proposal to CMS. The 1332 waiver was based on H.F.5, which was enacted without Dayton’s signature in April 2017 (Dayton had proposed an alternative measure that would have allowed people in Minnesota to buy into MinnesotaCare; that measure was not able to pass the state’s Republican-dominated legislature).

(For more than two decades, MinnesotaCare was a state program subsidizing health insurance for low-income residents.  As of January 1, 2015, it transitioned to a Basic Health Program under the ACA, becoming the first BHP in the nation. New York is the only other state that has implemented a BHP.)

H.F.5 created the Minnesota Premium Security Plan (MPSP), which is a state-based reinsurance program (similar to the one the ACA implemented on a temporary basis through 2016, and that Alaska created for 2017; more than a dozen other states have since implemented reinsurance programs). The reinsurance program, which took effect in Minnesota in 2018, covers a portion of the claims that insurers face, resulting in lower total claims costs for the insurers, and thus lower premiums (average individual market premiums in Minnesota decreased in 2018, 2019, and 2020 as a result of the reinsurance program).

For the first four years that the program was in operation, reinsurance would kick in once claims reached $50,000, and the program would then cover 80% of the claim up to $250,000 (this is similar to the coverage under the transitional reinsurance program that the ACA provided from 2014 through 2016). As described above, the coinsurance percentage has dropped to 60% as of 2022, and the reinsurance program is currently slated to terminate at the end of 2022.

H.F.5 was contingent upon approval of the 1332 waiver, because it relies partially on federal funding, in addition to state funding. Under the federal approval that was granted in September 2017, the federal government is giving Minnesota the money that they save on premium tax credits, and that money is combined with state funds to implement the reinsurance program (lower premiums — as a result of the reinsurance program — result in the federal government having to pay a smaller total amount of premium tax credits, since the tax credits are smaller when premiums are smaller).

It was expected that CMS would approve the state’s 1332 waiver proposal, and Governor Dayton requested that the approval process be swift so that the state could move forward with the implementation of the Minnesota Premium Security Plan in time for the 2018 plan year. Dayton indicated that his office had been told that approval would come in August 2017, but CMS didn’t approve the waiver until September 22. And the waiver approval letter noted that the federal savings for MinnesotaCare (the state’s Basic Health Program, or BHP) resulting from the reinsurance program would not be eligible to be passed along to the state — in other words, CMS would keep those savings instead.

(Federal BHP funding is equal to 95% of the amount that the federal government would have otherwise spent on premium subsidies and cost-sharing reductions for the population that ends up being eligible for the BHP. So lower premiums — as a result of reinsurance — for qualified health plans in the exchange means that the amount the federal government would have had to spend on premium subsidies for that population is lower. That translates into a smaller amount of funding for the state’s BHP, according to the approach that HHS initially took for Minnesota’s waiver approval.)

And based on the scathing letter that Dayton sent CMS a few days earlier, it appeared at that point that Minnesota could actually lose money on the deal — losing more in federal funding for MinnesotaCare than they would gain in reinsurance funding. Dayton noted in his letter that the 1332 waiver approval process had been “nightmarish,” and that Minnesota went to great lengths to follow instructions from CMS at every turn, throughout the process of drafting H.F.5 and the 1332 waiver proposal. He explains that CMS provided Minnesota with explicit guidance in terms of how to draft the reinsurance program while maintaining full federal funding for MinnesotaCare, and highlighted the fact that the state never deviated from the instructions that were provided.

The StarTribune editorial board called out then-Secretary of HHS, Tom Price, and the Trump administration for their lack of clarity on the issue, for apparently misleading the state during the 1332 waiver drafting process, and for effectively punishing the state of Minnesota for taking an innovative approach to ensuring that as many people as possible have health insurance.

Insurers filed rates based on reinsurance being available. And by the time the waiver was approved, there was very little time to evaluate the potential impacts of the funding changes, as rates had to be finalized by October 2 in Minnesota. The finalized rates did incorporate the reinsurance program; the state has accepted the approved waiver, but Gov. Dayton sent a letter to HHS on October 3, asking them to reconsider the MinnesotaCare funding cuts, but the issue has remained unresolved.

In May 2019, Minnesota leaders reached an agreement on a budget that included an extension of the reinsurance program through 2020 and 2021. The program had already been granted federal approval through the end of 2022; Minnesota Governor Tim Walz had hoped to implement a premium subsidy program and a new tax credit in Minnesota starting in 2020. But a compromise in the budget ended up with the state opting to continue the existing reinsurance program for two more years instead (as described above, the reinsurance program was subsequently extended for another year, through 2022, but with a reduction in the coinsurance rate).

Elimination of CSR funding results in additional funding cut for MinnesotaCare, but a lawsuit has partially restored that funding

Nationwide, nearly half of exchange enrollees benefit from cost-sharing subsidies. But in Minnesota, only 9% of exchange enrollees were receiving cost-sharing subsidies as of early 2021. This is because of MinnesotaCare, which covers all enrollees with income up to 200% of the poverty level. That’s the same group that would otherwise benefit the most from cost-sharing subsidies, so the fact that MinnesotaCare is available means that most of the people who would otherwise be enrolled in cost-sharing subsidy plans are instead enrolled in MinnesotaCare.

At first glance, this would appear to have made the uncertainty surrounding cost-sharing subsidy funding in 2017 a little less of a pressing issue in Minnesota than it was in many other states, since private insurers weren’t facing the sort of losses that insurers in other states were facing without federal funding for CSR.

But when the Trump administration eliminated federal funding for CSR in October 2017, HHS took the position that since CSR funding had been eliminated, the CSR portion of the federal funding for the BHPs in New York and Minnesota would be reduced to $0. This was not a cut-and-dried conclusion, however, as explained earlier in 2017 by Michael Kalina.

In January 2018, the Attorneys General for New York and Minnesota filed a lawsuit against the US Department of Health and Human Services, seeking to restore funding for their Basic Health Programs. A judge ruled in favor of the states in May 2018, ensuring that MinnesotaCare would continue to receive at least some CSR-based funding. The amount awarded to the state for the first quarter of 2018 was just over half of what the state had initially expected in CSR-related funding, but a larger chuck of the funding was restored later in 2018. According to the Star Tribune, however, Minnesota still ended up losing $161 million in federal funding for MinnesotaCare due to the CSR funding cuts.

In early 2019, the Trump administration proposed yet another funding cut (a third, after the cuts imposed by the reinsurance program and the elimination of CSR funding) as part of a new methodology for calculating BHP funding. This one was much smaller than the other two cuts, but taken together the funding reductions were pushing MinnesotaCare towards a looming budget shortfall.

But in 2021, the Biden administration gave MinnesotaCare $100 million in additional funding, provided by the American Rescue Plan.

State law provided 25% premium rebate in 2017; amendment to allow plans without essential benefits was cut from final legislation

Throughout 2016, then-Governor Dayton called for a state-funded premium rebate for people who buy their own insurance but aren’t eligible for the ACA’s premium subsidies (prior to the American Rescue Plan, premium subsidies weren’t available to anyone with a household income of more than four times the poverty level).

Governor Dayton also noted that the government needed to act quickly to stabilize the individual market in Minnesota, and by late November 2016, his patience with lawmakers was wearing thin. In a November 23 press conference, Dayton said that House Republicans needed to “stop dilly-dallying” and decide whether to move forward with Dayton’s rebate proposal.

Dayton had also indicated that he was considering calling a special session of the legislature after election day to address the situation, and that was being negotiated for December 20. But the talks fell through when Dayton and Republican House Speaker Kurt Daudt couldn’t agree on the three bills that would have been addressed in the special session; as a result, there was no special session.

Instead, the issue was taken up by lawmakers as soon as the 2017 legislative session began. On January 5, Minnesota Senators Michelle Benson (R, 31st District) and Gary Dahms (R, 16th District) introduced S.F.1. The bill called for using $300 million in state funding to provide a 25 percent rebate to roughly 125,000 people in Minnesota.

S.F.1 passed the Minnesota Senate by a 35-31 vote on January 12. Only one DFL Senator (Melisa Franzen, from Edina) voted with Republicans in favor of the legislation. It was then sent to the House, where an amendment was added that stripped out the requirement that health plans provide various mandated benefits (see “Journal of the Day” section “Top of page 154” in this version of the bill; under the terms of the amendment, as long as a carrier offered at least one plan with all the mandated benefits, they would have been allowed to offer others without mandated benefits).

The amended bill was sent back to the Senate on January 23; differences between the bills that the two chambers passed had to be reconciled before being sent to Governor Dayton for his signature. By that point, the amendment to allow less-robust plans to be sold had garnered national attention, and public outrage helped to push lawmakers away from the provision. S.F.1 had also called for $150 million to be appropriated for fiscal year 2018 (through June 30, 2019) from the state general fund to a state-based reinsurance program to stabilize the individual market (Alaska did something similar in 2016, preventing a market collapse), but that provision was also removed in the final version (Minnesota did ultimately set up a reinsurance program, effective in 2018, which has served to stabilize the market and reduce premiums).

A Conference Committee in the Senate recommended that the House “recede from its amendments” and the Conference Committee report passed the Senate on a 47-19 vote. The House passed the bill a few hours later, 108-19. It was sent to Governor Dayton, who immediately signed it into law. DFLers did have to compromise on one issue during the process: S.F.1 allowed for-profit HMOs to begin operating in Minnesota’s individual market, which had long been limited to non-profit HMOs.

Consumers were told to expect the premium rebates to show up by April 2017, but they were retroactively effective to January 2017. So a person who had been paying full price for a plan since January 2017 saw a substantial premium reduction on the April or May invoice. Going forward, for the remainder of the year, a 25% rebate was applied each month.

Since S.F.1 was signed into law with only a few days remaining in open enrollment (it ended January 31 that year), Governor Dayton and exchange officials were worried that there wouldn’t be enough time for people to learn about the rebate and apply for coverage before January 31. In December, Dayton had asked HHS to allow MNsure to extend its enrollment deadline to February 28 (instead of January 31) in order to allow lawmakers more time to work out the details of a state-based premium rebate while still allowing people to enroll after the legislative process is complete.

HHS denied the request for a blanket extension, but MNsure used its own authority on January 28 to grant a one-week special enrollment period (February 1 to February 8) due to exceptional circumstances. Although the state-based 25% premium rebate was available on or off the exchange, the one-week extension was only valid through MNsure; health insurers did not have to accept off-exchange enrollments without a qualifying event after January 31.

The 25% premium rebate program in Minnesota was only authorized for one year, so the rebates did not continue into 2018. And although almost 100,000 people received premium relief through the program in 2017, it ended up costing less than the legislature had allocated, and about $100 million was returned to the state’s budget at the end of 2017.

Minnesota health insurance exchange links

MNsure
855-3MNSURE (855-366-7873)

State Exchange Profile: Minnesota
The Henry J. Kaiser Family Foundation overview of Minnesota’s progress toward creating a state health insurance exchange.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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