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Insurance Premiums Reduced for Nearly 118,000 Minnesotans
Minnesota Ag Connection - 04/11/2018

Minnesota's Premium Assistance Program saved nearly 118,000 eligible Minnesotans and their families thousands of dollars on their health insurance premiums in 2017. Now, as the one-year program comes to an end, Minnesota Management and Budget (MMB) released a new report today providing additional data about the number of Minnesotans who benefitted from the program, and how.

In the fall of 2016, health insurance premium costs increased by 50 to 60 percent for Minnesotans in the individual insurance market for the new plan year, 2017. There was widespread concern that Minnesota's individual insurance market could collapse entirely in 2017. In response, Governor Mark Dayton directed MMB to design a premium relief plan that could be implemented quickly with little cost in order to provide premium relief as soon as possible in 2017. In late January of 2017, the Minnesota Legislature passed and Governor Dayton signed into law the MMB-designed Premium Assistance Program. Now, as the year-long program comes to an end, data from MMB shows that 117,985 Minnesotans benefited from the program in 2017.

"This program helped many thousands of Minnesotans and their families purchase health coverage they needed, at prices they could better afford," said Governor Dayton. "However, a recent Department of Health report showed that despite this assistance, rising premiums have caused over 116,000 Minnesotans to drop their health insurance altogether. I urge the Legislature to pass my MinnesotaCare Buy-In proposal. It would give Minnesotans who purchase their health insurance on the individual market the choice to buy the quality coverage they need, at prices estimated to be 28 percent less than other commercial health plans."

Minnesota's Premium Assistance Program was made possible due in part to a unique public-private partnership between MMB and insurance companies in the individual market, led by program director Dara Johnson-Ayodele. By working together to set up the program, many eligible Minnesotans saw the premium relief reflected on their monthly insurance statements within two months of Governor Dayton signing the program into law. Eligible policy holders received a 25 percent subsidy that adjusted their purchase price directly from their insurance carriers. MMB then verified the eligibility for every person receiving the subsidy, and reimbursed the insurance plans.

"Our goal with this program was to achieve three things in 2017: (1) provide immediate premium relief of 25 percent to those Minnesotans who qualified, (2) help stabilize the individual market in Minnesota, and (3) implement the program in a cost-effective way. We achieved all three objectives through this program," MMB Commissioner Myron Frans said. "This program is an example of the importance and effectiveness of collaboration with the public and private sectors working together to help nearly 118,000 Minnesotans reduce their health insurance costs by 25 percent in 2017."

According to MMB data released today, the average savings for a single person who received premium subsidies was $136.22 per month. The average savings for a family of four who received premium subsidies was $350.94 per month. In total, insurance companies requested a total of $137.3 million in reimbursements. To-date, the cost of administering the program has totaled $160,700.

Premium Assistance 2017 Program Totals:

- Total Minnesotans who received Premium Assistance: 117,985

- Total Number of Policies: 78,677

- Total Amount Reimbursed: $137.3 Million

- Total MMB Administration Costs to Date: $160,700

Pursuant to the Biennial Budget passed in 2017, $98.8 million of unspent program funds were returned to the general fund in November, and the remaining $75 million will be cancelled and returned to the state's budget reserve under current law. The Governor's supplemental budget reallocates these remaining program resources to help fund a reserve for the MinnesotaCare Buy In and for other priorities.

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