The Senate Commerce Committee recently discussed at length Senate File 1: the Minnesota Insurance Marketplace Act.
Part of the federal healthcare reform legislation (the Affordable Care Act) asks each state to set up an internet portal (also known as an “exchange”) for the purchase of health insurance. Small businesses with up to 100 employees or those without coverage can purchase health coverage in the exchange.
Legislators are working to submit a plan for a Minnesota exchange to the federal government. The plan is due by the end of March. Many other states (including Wisconsin) have decided not to organize their own ex-change. In this case, the federal government will establish one for them.
One of the most controversial provisions on this legislation is the seven-member governing board that contains no individuals from the industry to help shape correct policies, yet has control over the entire exchange including establishing health insurance premium rates and making all policy decisions.
The board also has the ability to limit the carriers it allows in the exchange. This may be referred to as an “active purchaser” model, but it really means that the board has the power to select carriers and health benefit plans for participation in the ex-change.
Senate File 1 provides the board with complete control to regulate and make decisions regarding the exchange with little to no accountability. The board is exempt from rule making statutes thereby allowing it to write its own rules.
The bill passed the Senate Judiciary Committee last week with much discussion around data pri-vacy issues and how much authority the board will have in collecting and disseminating data.
The bill abolishes the Minnesota Comprehensive Health Association (MCHA). MCHA is Minnesota’s reinsurance pool for those who are turned down by private insurance for issues such as pre-existing conditions.
More than 26,000 individuals are currently covered under MCHA. There is no plan as to what will happen with these individuals once MCHA is abolished, or how it MCHA will be dissolved.
The bill in its current form is paid for by an up to 3.5 percent withhold, or tax, on premiums. This is problematic and early estimates indicate that this method of payment alone may not raise enough funds to cover the cost of operating the exchange. In the weeks ahead, the bill faces more committee hearings and discussion.