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Governor says Minnesota won't extend insurance coverage despite Obama 'fix'

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July 14: Gov. Mark Dayton speaks to the media at the University of Minnesota's Hubert H. Humphrey School after announcing he would seek a budget deal with GOP leaders in Minneapolis. (AP/The Star Tribune)

Gov. Mark Dayton announced Monday that Minnesota will not allow people to keep existing insurance plans for another year, despite President Barack Obama's plan to allow it.

Dayton announced his decision in a letter to the Council of Health Plans, which represents Minnesota's largest insurance companies. Last week, Dayton said he believed Americans should be able to keep existing insurance plans under the federal overhaul.

While he praised Obama's decision two days later, Dayton never said the state would actually grant the extension.

The executive director of the Council of Health Plans said in a letter to Dayton earlier Monday that Obama's extension would have created disruption and uncertainty in the state's new insurance marketplace. Julie Brunner said it would have invalidated 2014 insurance rates already agreed upon between the companies and the state, and left almost no time to revise them with insurance coverage under the federal law set to begin on Jan. 1.

"The stability of Minnesota health care is too great a price to pay for the narrow one-year delay offered by President Obama," Brunner wrote. The council said about 140,000 Minnesotans were notified that their existing plans would be subject to major changes under the federal law.

Dayton wrote in Monday's letter that he realized the extension is not workable in Minnesota and admitted it would have caused confusion in the insurance marketplace. Dayton wrote he was confident that insurance alternatives available through MNsure, Minnesota's health insurance exchange, would be affordable and offer improved benefits and strong consumer protections.