Gov. Mark Dayton on Wednesday warned Republican lawmakers he won’t agree to give insurance companies hundreds of millions of dollars to stabilize Minnesota’s individual health insurance market without more information about how the companies would use the money.

The House and Senate passed bills last week to spend, respectively, $384 million or $600 million over the next two years on a new “reinsurance” program to protect insurers against unusually high claims. GOP lawmakers say it’s necessary to keep more providers in the market. They hope it drives down premiums that have surged by more than 50 percent in recent years.

House and Senate lawmakers are now meeting to refine the plans into a single bill to send to Dayton.

But the DFL governor said he’s worried money for reinsurance would otherwise go to the state’s subsidized health insurance program, or be redirected from the state’s general fund or budget reserves.

“I think we have a right to know … how this money is going to be used,” he said.

Dayton wrote to GOP lawmakers that he supports the idea of a reinsurance program, but urged them to pay for it with a tax on the health insurance industry rather than with other state funds.

Rep. Greg Davids, R-Preston, author of the reinsurance bill that passed the House, said he doubts the Republican majorities in the House and Senate will support a new tax. He’s optimistic the new program would work as intended and help insurance companies bring down premiums.

“I can’t guarantee companies coming in,” Davids said, “but I can guarantee that if we don’t do this, there will be fewer than there are today, which would be devastating at this point.”

Projections from state commerce officials suggest that the $384 million House reinsurance plan could help lower premiums by around 17 to 18 percent. Estimates for the $600 million Senate plan put the premium reductions at 20 to 23 percent. Neither bill, however, includes requirements that the state support be used to help reduce premiums, or a specific target for reductions.

The governor and lawmakers say they need a bill signed into law by March 31 so insurance companies can factor that into their decisions about 2018 health plan offerings.

Also Wednesday, a House committee voted to eliminate MNsure and send individual market customers to the federal exchange. Rep. Matt Dean, R-Dellwood, said the state should send private insurance buyers to the federal exchange and move the people receiving subsidized health care under the state’s MinnesotaCare program to county services.


Star Tribune reporter J. Patrick Coolican contributed to this report.