Change is coming. Starting October 1, 2013, more than one million Minnesotans will have the opportunity to enroll in health insurance through a new Exchange. The Exchange, a key element of the federal Affordable Care Act, will be a web-based marketplace where individuals and small businesses can shop for, compare and purchase health insurance.
This can be a positive change for Minnesotans. We know the current insurance marketplace isn't working well, particularly for individuals and small businesses. One reason is that they lack the buying power of larger employers and are unable to negotiate for better value and higher quality. They struggle to find affordable insurance that meets their health care needs.
We have the opportunity to create an Exchange that will encourage a better health insurance marketplace for more than a million Minnesotans.
This week, the Minnesota House and Senate will hash out their differences on Exchange legislation in a conference committee (Senate File 1 and House File 5). Both the House and Senate bring strong positions to the bargaining table, but they differ in at least two important areas.
An Exchange that looks out for consumers. Minnesota needs an Exchange board with the authority to act in the best interests of consumers, also known as a “smart purchaser” model. Giving the Exchange board the ability to select which plans will be sold in the Exchange creates an incentive for insurance carriers to compete on value and quality, leading to better insurance plan choices for consumers. The alternative - a “clearinghouse” model where all plans that meet a minimum standard must be sold in the Exchange - does not give the Exchange board any ability to improve the current market for consumers.
Both the House and Senate include a smart purchaser model. However, the House position would potentially allow hundreds of plans to automatically be allowed in the Exchange before the board's smart purchasing authority would kick in. We support the Senate position, which would give the Exchange meaningful authority to seek better value and quality for consumers.
An Exchange that is wisely funded. It is important that the Exchange be self-supporting, does not compete for resources with other important state priorities, and asks those who benefit most from the Exchange to pay the largest share of the costs. We support withholding a small percentage of each premium sold through the Exchange, known as a "premium withhold," to fund the Exchange. Using a premium withhold would ensure that Exchange revenues automatically increase to cover additional costs as enrollment increases, that it would not compete with other priorities for general fund or Health Care Access Fund resources, and that insurance carriers would pay for a marketplace that is expected to bring $3 billion in revenues to their doorsteps.
We support the House position, which uses a premium withhold to fund the Exchange. We oppose the Senate position to use tobacco tax revenues from the Health Impact Fee. We also strongly oppose using the Health Care Access Fund to fund the Exchange, since these resources are needed for maintaining affordable health care for working Minnesotans. Although the Health Care Access Fund is not included in either the House or Senate bill, it could be brought in as part of final negotiations.
This is an important moment for our state. Minnesota prides itself in being a national leader in health care reform, but we could lose that mantle if we don't create an Exchange with the ability to improve the health insurance marketplace for consumers.
We thank Senator Lourey and Representative Atkins for their leadership and perseverance in moving the Exchange legislation through the Senate and House. Their hard work - along with a near record number of committee hearings, dozens of hours of testimony and countless amendments - have culminated in a conference committee with the opportunity to create an Exchange that Minnesota can be proud of.