Governor Mark Dayton wants to spend $313 million to offer a one-off 25 percent discount to middle class Minnesotans facing skyrocketing health insurance premiums next year.
Dayton has come under pressure since insurers revealed premium hikes averaging 59 percent for anyone who buys on the individual market, either directly from insurance companies or through Minnesota's health insurance exchange MNsure.
After admitting that this year's increases are making the Affordable Care Act "unaffordable," Dayton is proposing a temporary solution that will give a rebate to the estimated 123,000 Minnesotans who buy on the individual market but who earn too much to qualify for federal tax credits.
Under his proposal, any individual earning more than $47,500, or a family-of-four with a household income of more than $97,200, will receive a rebate reducing the hike to around 16 percent, in turn reducing monthly premiums by 25 percent.
The move would come at a cost of $313 million, paid for from Minnesota's budget surplus. This money would be diverted to provide the rebate, instead of being added to the state's $1.9 billion cash reserves.
Dayton said the money comes from the state's "rainy day funds" and says that right now it's "pouring" on the Minnesotans affected by the hikes.
The Governor's Office has released this table to show how his plan would help:
Looking past 2017, Dayton says he will be looking for longer-term solutions to the unsustainable hikes in health insurance premiums in Minnesota, appointing a health care advisory task force after the elections to come up with a plan of action.
But he will also call on the next federal administration to make improvements to the Affordable Care Act at a national level, which he says is where most of the price pressure is coming from.
Dayton challenges rivals
Dayton says his proposal is a draft that will require "refining" through discussions with lawmakers, insurers and experts.
At the same time he is open to hearing from anyone who has "a better plan," and has taken a swipe at Republican lawmakers who have been critical of the Governor in recent days.
"In these final days before the Nov. 8 election, the Affordable Care Act and MNsure have been targets of repeated attacks by politicians, both in Minnesota and nationally, who have never supported those programs, have blocked all efforts to improve them, and are now trying to maximize their political advantages by trashing them."
He says any alternative proposal must achieve three things: The state must be able to "start it and administer it under severe time constraints," it must provide immediate financial assistance to those who would otherwise face "excessive" price hikes; and it can cost no more than the $313 million that comprises the additional budget surplus (basically the bit of the surplus that hasn't been allocated yet).
Dayton's "unaffordable" comment has been used as a stick with which Republican politicians across the country and right-leaning media have been using to beat Democrat opponents, something that Dayton has said he "regrets," WCCO reports.
On Wednesday, Rep. Daudt said Dayton should resign if a solution isn't found, criticizing Dayton's argument that partisan politics at state level is stopping improvements to Minnesota's health insurance system from happening.
"You can throw all the money you want to at this problem," he said, according to MPR."There will be people in the state of Minnesota on January 1 that will not be able to buy health insurance at any cost. That is unacceptable, and that was brought on 100 percent by Governor Dayton and the Democrats in the Legislature."