This Week in the MN House: Walz's Budget, No Health Action


One_Expensive_Minnesota.jpg• The DFL are rolling out their 2020-2021 budget targets. They will be discussing the budget resolution following floor session in the Ways & Means Committee

• On Monday, Rep. Mary Franson (R- Alexandria) unveiled House Republicans' plan to combat fraud in the CCAP system.

• Fiscal note delays caused the deferral of three DFL top-10 bills to next Tuesday in the Jobs Committee. The bills:  HF5 (Paid Family Leave), HF6 (Wage Theft),  HF11 (Sick and Safe Time) 

• After two months of work, Democrats have passed no bills to address the cost of health care, and continue to block procedural motions to bring a reinsurance bill to the floor.  See below to read our "primer" on why reinsurance is the better option.

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A Quick Primer on Reinsurance vs Premium Subsidies

A summary of an opinion piece by Rep Greg Davids (R-Preston in the Star Tribune, March 14, 2019:

The reinsurance program created by the Republican-led legislature in 2017 should be extended. It provides for a state-funded pool to cover low probability but high cost health claims that insurance companies might face. Without these risks, health insurance companies have been willing to lower individual insurance premiums

budget_vote_.jpg• The Minnesota reinsurance plan is considered a national model. It’s been implemented in Republican-led states, and hailed even by Democratic U.S. Sen. Amy Klobuchar.
• Reinsurance works. Gov. Tim Walz’s administration projects extending it would lower premiums 20 percent for the next three years. It would cost taxpayers about $54 million next year.
• Reinsurance will help more people than the governor’s plan; reinsurance would help all 160,000 Minnesotans in the individual market.


Instead, Walz’ plan would drop the reinsurance program and substitute a 20 percent subsidy to individuals to reduce their health care premiums.
• Without the risk pool, insurance companies would again face the potential for higher medical costs. Individual premiums will go up as they did before. The 20% subsidy would be applied against these higher rates.
• Walz’ subsidies would cost taxpayers an estimated $185 million in 2020.(i.e., more than 3-times the reinsurance option).
• Walz’ subsidies would help only the 80,000 people who don’t receive federal tax credits. (i.e., half as many people).

The governor argues that subsidies would tap federal funds, reinsurance would not.

Someone should remind the governor that we pay federal taxes, too.