Let’s find solutions to health insurance marketplace
I’m not running for re-election, so I am not interested in political posturing. The recent announcement of rate increases for insurance plans has created an opportunity for those running for re-election to posture for short term political gain. This rhetoric makes it difficult to really comprehend what has happened to premiums, why it continues to occur, and perhaps more importantly, how purchasers impact costs.
The announcement of 50 to 67 percent increases for the individual market premiums has been responded to with alarm and fear. Those buying health insurance individually can see their neighbors on employer-provided insurance sometimes paying much less for a plan with better coverage and a broader provider network. This leaves purchasers to ask why, what can be done in the immediate future, and what can be done over time to bend the health care cost curve?
No wonder there is frustration with the most recent set of premium hikes. They are appalling and unacceptable, and all the explaining and blaming in the world will not change the reality that unless the Legislature acts, this group will be disproportionately paying for care. This is unfair.
A quick response to support these individuals is the Legislature’s highest priority. Action is necessary to stop individuals from dropping coverage because of cost, and as a result risk the possibility of bankruptcy if they require expensive care. There are actions that can be taken quickly to mitigate the problem in the short term. For example, there is money available for a short-term market fix because we did not pass a tax bill last year. I know I would rather use the money set aside in the tax bill to write down a person’s health care policy rather than provide a $40 million tax break for tobacco companies. A structured subsidy could temporarily lower premiums to be in line with rates in the small group market. This action could help those in distress immediately, giving the Legislature time this session to stabilize this market long-term so insurers can stay in this market with affordable plans.
For long-term solutions, the Legislature will have to come together and pass the reforms offered last year by Senate Democrats, along with new proposals supported by both sides of the aisle. It is frustrating that this crisis could have been mitigated. If the Senate’s proposal to offer Minnesotans who were denied federal tax credits the ability to receive state tax credits to combat rising insurance premiums had received serious consideration, then many of these increases could have been decreased or eliminated. The Senate DFL caucus was the only group to offer a realistic, money-saving plan to deal with rising premiums. Unfortunately, these reforms met the political realities of election politics, and inaction has placed us in a reactive position.
In addition, a number of proposals were blocked that would have allowed us to examine innovative long-term solutions for the individual market. The refusal to even allow an intelligent conversation about such reforms as providing a public option or exploring premium stabilization mechanisms once again puts us behind a year in our ability to offer real solutions.
In addition to addressing the volatility of the individual market, we must continue to tackle the actual cost drivers in health care: prescription drugs prices, an aging population, and over-utilization of high-cost services. These are the real reasons health care is becoming more expensive across all markets. Changing these trends over time will help contain costs and stabilize rates. Initiatives by the Senate Democrats to get control over drug costs at the state level should be supported rather than blocked as they were last session.
Rising costs of health care and insurance present difficult times for Minnesotans and their families. This deserves the Legislature’s and the insurance industry’s serious consideration of what will actually turn the situation around. No matter how hard we work, or how valuable our solutions are, we are not going to change this situation without cooperation between parties. I think we agree on much more than it appears. We both want to see this problem fixed, and we want to make sure Minnesota’s legacy of comprehensive, accessible, and innovative health care can live long into the future. The challenge is for both parties to institute the necessary changes we can be proud of for generations to come.
State Sen. Kathy Sheran (D-Mankato) represents Senate District 19.