Gov. Mark Dayton signed legislation Wednesday, March 20, creating a health insurance exchange in Minnesota, a move supporters call the state’s most sweeping coverage reform in 50 years.
About 1.3 million state residents are expected to use the online marketplace for obtaining health insurance by 2016.
After weeks of contentious debate with Republicans and business groups criticizing the cost and leadership structure for the new marketplace, the Democratic-Farmer-Labor Party majority passed legislation for the health exchange without a single GOP vote in the state House and Senate.
Health insurance companies Wednesday predicted the exchange might not hit enrollment projections due to problems with the legislation. But in comments at the Capitol, Dayton focused on support from doctors, patient groups, unions and one organization that represents some small businesses.
“This is not meant to serve the insurance industry, or anybody else’s industry,” Dayton said. “It puts the people of Minnesota and their interests in charge of our health care system.”
Individuals and small businesses can start shopping for coverage on the new marketplace beginning in October. The name “health exchange” is not popular, state officials have acknowledged, so they announced Wednesday that the marketplace will be called MNsure (pronounced Minn-sure).
The exchange is a key component of the federal health care overhaul law passed in 2010. Beginning next year, the law requires
almost all Americans to have health insurance, and exchanges are meant to be a key resource for consumers who have lacked coverage in the past.
In Minnesota, about 300,000 uninsured people are expected to gain coverage.
The federal health law has become a symbol for the partisan impasse in Washington D.C., and Dayton said Wednesday he regretted DFLers and Republicans in St. Paul couldn’t find common ground on health policy, either.
Dayton blamed “exaggerations” put forward by Republicans and an “ugly” campaign last year to block the health law, both at the U.S. Supreme Court and through an election challenge to President Barack Obama. The health law survived both those challenges, Dayton said, and Minnesota is now moving forward on the state’s own terms, rather than adopt a federal model.
But Rep. Jim Abeler, a Republican from Anoka, said DFLers in Minnesota had a chance to win Republican support. It didn’t happen, he said, because the DFL wouldn’t agree to limit the power of the health exchange’s board of directors or allow insurance industry representatives on the board.
“We could have done better,” said Abeler, the only Republican to serve on a conference committee that reconciled House and Senate versions of the exchange bill. “The weakness was, it was all passed on one side.”
The exchange is supposed to be easier for consumers to use than the current health insurance market. The exchange also is the mechanism by which people can obtain federal tax credits that could significantly reduce out-of-pocket health insurance costs.
Dayton has tapped $110 million in federal grants during his more than a year of planning for Minnesota’s exchange. It will consist of a website and call center for consumers to learn about health insurance options; help also will be available from health insurance brokers and a new group of advisors called “navigators.”
“It’s significant because for the first time in Minnesota history we put consumers on the same level playing field as the carriers from whom they are purchasing health insurance,” said Rep. Joe Atkins, DFL-Inver Grove Heights, who sponsored the health exchange bill in the House. “Carriers will have to compete more fiercely than they ever have in the last 50 or 100 years for consumers’ business.”
The exchange will operate as a new state government entity with about 86 employees. It will withhold a portion of premiums from policies sold to cover $50 million per year in operating expenses.
A seven-person board of directors will lead the exchange. Six members will be appointed by the governor with ratification votes in the House and Senate; the state’s human services commissioner holding the seventh slot.
It’s not clear which health insurance companies will offer products on Minnesota’s health exchange. Carriers have until May 17 to file plans.
Insurance companies have bristled at “active purchaser” powers in the law that will let the health exchange board exclude products that are deemed not in the best interest of consumers beginning in 2015.
“Consumers will feel the impact if a plan is on the exchange one year and not permitted to sell that product on the exchange the next year,” Julie Brunner, executive director of the Minnesota Council of Health Plans, wrote in a letter to Dayton. Brunner’s group represents nonprofit health insurers in the state.
“Lack of choice,” she wrote, “will potentially make the exchange a less attractive option for consumers.”
Dayton offered no clues Wednesday about whom he might appoint as board members for the exchange. His submissions are due in April.
By May, the state is scheduled to launch a public education and outreach campaign for MNsure. A call center should be open by September, and enrollment begins Oct. 1 for coverage taking effect Jan. 1, 2014.
The health exchange will be an option for people in the state’s individual and small-group markets — currently about 12 percent of the population — as well as the roughly 9 percent of residents in Minnesota public health insurance programs.
It won’t immediately be an option for people covered through larger employer groups, nor will it be used by Medicare beneficiaries.