Gov. Mark Dayton and GOP House Speaker Kurt Daudt were not able to broker a deal Tuesday on how to best provide assistance to Minnesotans facing steep health premium increases next year, but the urgency of the meeting one week before the November election underscores the political potency of the issue.

After months of failed negotiations for a special legislative session on transportation and taxes, the spike in health premiums has suddenly emerged at the top of political leaders’ agenda.

Early in October, the 5 percent of Minnesotans who purchase health care coverage on the individual market learned they would face enrollment caps, fewer choices in providers and premium increases of more than 50 percent, among the highest increases in the country.

Constituents have flooded legislators with phone calls mainly to complain about the higher costs, legislators said. The intense political pressure comes just days before a high-stakes election where voters will decide control of the House and Senate.

Dayton and Republican House leaders called their meeting productive Tuesday, pledging to find a timely solution for those now beginning to shop for health coverage on the individual market.

Dayton’s administration last week proposed spending $313 million to offset premium hikes for an estimated 123,000 Minnesotans, an unprecedented expenditure of tax dollars to drive down individual health insurance costs. Political leaders are trying to lower premiums for Minnesotans who earn too much to qualify for federal tax credits.

“We’ll work on that and be ready — I hope and believe — to go forward with a special session as necessary very shortly after the election,” Dayton said, adding that he wants to give Minnesotans most affected “the assurance as rapidly as possible about what they can expect to receive by the time their bills become due.”

Daudt, R-Crown, said Tuesday that he has not yet taken a position on Dayton’s rebate proposal, saying he would seek input from fellow Republicans in the coming days. “We agree that folks are going to need some help, and we’re going to agree to be part of the solution,” Daudt said.

Republicans have sharply criticized Dayton and DFLers for the soaring rates, since Democrats were so eager to embrace the federal Affordable Care Act.

Dayton’s rebate proposal comes after similar plans by the Senate DFL and House GOP. His proposal would be paid for by the $313 million of budget surplus scheduled to be deposited in the state’s rainy-day fund, typically used during economic downturns.

Dayton and other legislators say this unprecedented use of the budget reserve money is a wise use of taxpayer dollars.

“The idea that the governor has for using the money that was supposed to be going into the reserve fund is that it is a rainy day,” Minnesota Management and Budget Commissioner Myron Frans said. He added that Dayton believes the situation is unusual and will be a massive blow to the pocketbooks of thousands of residents. “He feels it’s targeted, it’s limited and it’s an appropriate use for these funds,” Frans said.

The money, however, would be a one-time fix, which means consumers could be facing even steeper increases a year from now. That’s why Dayton and legislators are looking for a longer-term solution.

Rep. Greg Davids, R-Preston, had heard from more than dozen constituents on Tuesday angry about the premium hikes. He said he’s confident the political pressure will force lawmakers to act quickly.

Davids, co-chairman of the MNsure legislative oversight committee, said he was heartened to see Dayton’s proposal because “It gives us starting point to start talking.”

Sen. Tony Lourey, DFL-Kerrick, who also co-chairs the same committee, said he welcomes the opportunity to work toward driving down premiums in a permanent way.

He and other legislators said it is possible to fund Dayton’s rebate proposal through other existing pots of money, but that at this point the funds intended for the budget reserve “probably is the best source of money for this problem.”

Dayton and Daudt said Tuesday that they hope to hold a special session shortly after the election if they can come to an agreement on how to address the immediate problem.

Ricardo Lopez • 651-925-5044