Sen. Franzen Update: January 27, 2017

Volume 3, Issue 4

A weekly message from your Senator

Dear Constituents and Friends,

This week was all about health care with S.F.1. debated in conference committee and voted on the Senate floor. It has now been signed into law by Governor Dayton. I was honored to be appointed to serve on the conference committee to bring out the compromise language that will provide a 25 percent discount to people who buy insurance on the individual market, but do not receive federal subsidies. People in that group have seen their premiums rise by up to 60% this year. The compromise bill includes $15 million to help cover health insurance costs for people with certain serious conditions who lose their coverage. 

I want to thank all of those who engaged in this debate particularly my constituents and many Minnesotans who contacted me and will benefit from this legislation.The bill in its entirety can be found here

Sincerely,

Senator Melisa Franzen

Senate Passes Premium Relief Bill S.F. 1

This week the Senate voted on the Premium Relief Conference Committee Report. After swiftly moving through the conference committee process, the bill as passed will provide immediate relief to Minnesotans who are struggling with increased health insurance premiums. The bill, signed by the Governor, will reduce 2017 health insurance premiums by 25% for Minnesotans, regardless of their income, who purchase their insurance on the individual market and do not receive federal tax credits.

Minnesotans eligible for the subsidy would see immediate premium relief on their insurance bill from the health plans and the health plans would be reimbursed by the Department of Management and Budget. This plan would reduce the average premium increase facing Minnesotans in the individual market from 55% to 16%, and some families could save as much as $594 per month on their premiums.

Under the bill, the health plans are required to implement the subsidy program no later than April 30, 2017, and the 25% subsidy is retroactive to January 2017. The 2017 subsidy program will take the health plans approximately six to eight weeks to implement, so Minnesotans eligible for the subsidy would begin to see the discounted rate on their April or May premium bills.

The bill appropriates $312 million from the budget reserve account to the general fund for the premium assistance payments and $157,000 is appropriated to the Office of the Legislative Auditor for the purposes of auditing the premium assistance program.

Additionally, the bill includes several health insurance market reforms. One reform measure that is the most troubling to many DFL senators is a provision to allow for-profit HMOs to operate in Minnesota. This drastic change could potentially have significant impacts for rural and smaller hospitals and medical providers.

Governor’s State of the State 

On Monday, January 23 Gov. Dayton gave his State of the State Address to the joint convention of the House and Senate. His address began with a reminder to Minnesotans of the promises he’d made six years ago during his inaugural speech which emphasized a balanced budget and job growth as his top priorities.

The Gov. Dayton, touted his accomplishment of turning a $6 billion deficit in 2011 into a projected surplus of $1.4 billion. Minnesota also has a $2 billion rainy day fund to protect the state against future economic downturns.

The governor also noted that when he took office six years ago, 202,000 Minnesotans were unemployed and the unemployment rate was 6.9%. Since then, the state has added 255,000 jobs and unemployment is now below 4%.

The state of the state is strong and the governor vowed he will work to continue “our state’s economic prudence.” However, as good as the news is, not everyone is sharing in the economic successes. There are many Minnesotans who continue to struggle and that economic disparity provides an uncertain future for many. With this in mind, the Governor outlined some of his priorities for the next two years:

  • Education:The governor wants to continue his strong commitment to education with increases in per pupil spending, support in funding for child care, pre-kindergarten, and higher education.
  • Transportation:After he thanked the Senate for trying to pass sustainable transportation funding, Gov. Dayton labeled Minnesota’s transportation deficiencies as “urgent.” Gov. Dayton said we need to invest in state highway projects and road and bridge improvements. He emphasized he is willing to work with legislators to find a real solution most of us can accept. He also reiterated that doing these projects will be costly, but it would be far costlier to ignore them.
  • Health Care:The Governor advocating for preserving important parts of the Affordable Care Act, such as letting parents cover adult children up to age 26 and requiring insurers to accept people with pre-existing conditions. He also praised the improvements in MNsure and said more work needs to be done to ensure those who faced drastic increases in premiums will not be faced with rising costs in the future.
  • Dayton also provided a vision for a public health-insurance option. In a prepared statement, the governor’s public option plan indicated that health insurance coverage would be available to Minnesotans who earn between 201% and 400% of the federal poverty level. For a family of four, qualifying household income would be between $49,200 and $97,200 annually.
  • Clean Water:Clean water will continue to be a priority for this administration. He called out a proposed tax provision to help local governments and farmers with the new buffer law and hinted at including water-treatment projects in rural Minnesota as a priority.

About 40 minutes into the governor’s speech, his State of the State address was cut short due to a brief fainting spell. He was able to stand on his own after several minutes and was able to walk from the House Chamber. The Governor was checked out and is okay. He was able to release his budget recommendations on Tuesday, Jan. 24.

Expanding affordable health care options key part of Dayton budget

MinnesotaCare has long been a nation-leading example of quality, affordable healthcare unique to Minnesota. It is a partially subsidized plan available to Minnesotans who earn between 133% and 200% of the Federal Poverty Guidelines (FPG), or $32,398 to $48,600 for a family of four.

Due to rising insurance premiums and the limited number of participating health plans on the individual market across the state, Minnesotans with incomes too high to qualify for MNCare need more affordable and accessible health insurance options. Part of the Governor’s budget proposal would allow Minnesotans to purchase MNCare plans statewide regardless of their income. Plans would be available through the MNsure website. Minnesotans with incomes between 200% and 400% of FPG would still be eligible for discounted rates with federal tax credits. For Minnesotans with incomes over 400% of FPG, the average statewide premium would be approximately $469 per month—more than 12% less than the average statewide premium currently available on the individual market.

Ultimately, the proposal would increase choices, encourage competition in the marketplace, and ensure that all Minnesotans have access to affordable insurance with a comprehensive network of health care providers. The one-time startup cost of $12.9 million is funded entirely by premiums paid by Minnesotans who choose to buy MNCare coverage. If the Legislature approved this plan by April 1, Minnesotans could begin to purchase MNCare plans during the 2018 open enrollment period.