Senators pass health insurance premium aid bill as debate focuses on rural Minnesota

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ST. PAUL — Rural Minnesota may never have been mentioned so often in a state Senate debate not about a specific rural issue.

Small towns and farmers were featured Thursday, Jan. 12, before senators passed 35-31 legislation to help Minnesotans afford individual health insurance policies.

Rural residents like farmers tend to rely on individual policies more than those living in cities.

Sen. Torrey Westrom, R-Elbow Lake, compared a hay rack tire losing air to health insurance problems. Sen. Tony Lourey, D-Kerrick, said that in a blizzard, his cows need hay immediately, like many insurance policyholders need state aid now.

Many senators said those in rural Minnesota are struggling to afford insurance, and some have decided to forego policies this year because they are so expensive. Sen. Scott Dibble, D-Minneapolis, said some parents even are keeping their children out of school sports because they will not have insurance.

Sen. Dan Schoen, D-St. Paul Park, said that people who live in his hometown, western Minnesota's Murdock, cannot afford to wait for state aid.

He and other Democrats said that the Republican plan that passed would delay help until next year. Such a wait hurts small towns, Schoen said.

While the legislation is aimed at helping the 5 percent of Minnesotans who rely on individual policies, a key provision focuses on farmers.

The GOP bill would allow agricultural cooperatives to set up health insurance pools with the intent of lowering prices.

"The history of co-ops in the state of Minnesota makes people very comfortable," said bill author Sen. Michelle Benson, R-Ham Lake, who like Schoen, calls Murdock her hometown.

Lourey and other Democrats said they want to get basic premium relief to Minnesotans right away, but could support the ag co-op idea later. Benson, however, said that work needs to begin now.

"It takes a long time to build an insurance product or build a co-op, and we need to send those signals early," she said.

The biggest debate Thursday was over how much to include in the first of at least two bills to fix insurance cost problems. Democrats wanted to limit the initial bill to premium relief, while Republicans said they needed to get to work on longer term fixes now.

Also in the bill is a provision to allow for-profit insurance companies to sell in Minnesota, even if they are based in other states. Now, only nonprofit, Minnesota-based organizations sell individual health insurance policies.

The House is expected to take up its version of the measure next week and pass a slightly different bill. That would send the issue into a House-Senate conference committee that would bring in the Dayton administration to work on a final bill.

The Senate bill would provide immediate relief, but soon would require the state to eliminate aid to Minnesotans making the most money. The Dayton plan would provide relief for everyone not getting federal aid, regardless of income.

Commissioner Myron Frans of Minnesota Management and Budget, the state's finance agency, said that basing premium relief on income would be expensive and likely would not produce checks for insurance customers until 2018 because the state is not set up for such a program.

The bill sets aside $450 million to provide relief to about 100,000 Minnesotans who buy individual health insurance policies, but do not get federal subsidies.

State officials said last year that insurance premiums would rise up to 67 percent this year, and fewer insurers would offer policies.

Residents in many western and southern Minnesota counties had only two choices when insurance policies went on sale in November, Within a few weeks, Medica reached the limit of new policies it would sell, leaving the mostly rural area only a more expensive and restrictive Blue Cross Blue Shield policy.

Lourey said that he agrees with much of what is in Benson's bill, but it needs to be streamlined to focus on immediate premium relief so help will be available quickly.

"I don't think we are in that much disagreement," Lourey said.