Don’t Hurt Minnesota Families and Raise Taxes on Essential Coverage

At first glance, supplemental and voluntary benefit products, dental insurance, long-term care insurance and disability income insurance share one key attribute: they provide millions of American families with crucial financial support when they need it most.

But a proposal put forth by the Walz Administration in Minnesota will double the taxes on these critical coverage products and put them out of reach for Minnesota families, seniors, and small businesses. The state is planning to levy a costly assessment that will double the premium tax for each of these products and siphon the funds away to support an unrelated state health care program. This assessment will result in higher premium costs and make it harder for Minnesota families to afford the protection they need.

Minnesota lawmakers levying a surcharge on families’ crucial financial protection products is bad enough. It’s especially wrong to make families pay higher premiums for these products and then take the extra money to fund an unrelated government program.

Governor Walz is proposing to use this new tax on premiums to fund a program that will lower premiums for those that buy individual Affordable Care Act medical coverage on the state exchange. While that is a good goal, this program should not be at the expense of those trying to protect themselves from unexpected costs that aren’t covered by their medical insurance. Unlike those buying major medical coverage, these workers, including union members, state and local government employees, and employers will only see premiums increase with no associated benefit.

Hard-working families depend on these products in many ways. Supplemental benefit products like cancer, critical illness and accident insurance help people pay for expenses that are not covered by major medical insurance.

Disability income insurance provides families with paycheck protection if a medical condition or accident keeps the breadwinner out of the workplace. It also supports paid family leave, ensuring that people don’t have to choose between caring for their family or maintaining their paycheck.

Long-term care insurance ensures that family members will receive the care they need while preserving their financial security and independence.

Dental insurance allows families to regularly access preventative care and to better afford treatments for unanticipated dental issues.

Millions of Americans benefit from these financial protection products, including many Minnesota families.

Any legislative proposal that would make it harder to access affordable financial protection products like these is bad public policy and should be reconsidered.