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Dayton administration commits to state-run health exchange

The Dayton administration on Friday sent an early signal to the federal government that Minnesota will pursue a state-run health insurance exchange and apply for an additional $39 million in grant funding to develop the tool, a crucial component of the federal health care reform law.

The U.S. Department of Health and Human Services postponed two key Friday deadlines till mid-December, but Minnesota pushed ahead anyway, emphasizing Gov. Mark Dayton’s commitment to implementing the exchange. Federal funding for the project will top $100 million if the grant is approved.

With DFL majorities in the Legislature, what once looked like a lonely project for the executive branch has become one of the most important issues for lawmakers this session.

House Speaker-designate Paul Thissen said in an interview on Friday that moving forward with an exchange is a key piece of the DFL’s 2013 legislative agenda. The exchange, expected to serve roughly 1.2 million Minnesotans, functions as a marketplace for individuals and small businesses to purchase and compares insurance options, similar to travel websites like Orbitz.

“I am delighted to submit Minnesota's Exchange Blueprint application and confirm Minnesota's intent to develop and operate a State-based Health Insurance Exchange,” Dayton wrote in a letter to HHS Secretary Kathleen Sebelius on Friday. “I strongly share your commitment, and that of President Obama, to ensuring access to affordable, high quality health care coverage for all Minnesotans.”

But the challenges to implementing the exchange’s complex IT infrastructure and reaching policy agreements within federal deadlines have caused some to question whether Minnesota, which is one of at least 17 states moving forward with a locally run exchange, will finish on time.

“Completing this application in is an important step,” Minnesota Management and Budget Commissioner Jim Schowalter, who is leading the exchange planning process, said in a statement. “But we still have a lot ahead.”

Lawmakers must come to an agreement on the exchange’s governance structure, funding mechanisms and other operations before the end of March or current guidelines say the federal government will step in.

But it’s unclear if the federal timeline, which also requires the exchange to start enrolling participants by October 2013 and become fully operational by January 2014, will stay in place. The Obama administration postponed today’s deadline for states to say whether they would run their own exchanges on Thursday — just a day ago — at the request of the Republican Governors Association.

Last week, Sebelius also pushed back the deadline for the blueprint that Minnesota submitted today. The Dayton administration stuck to the original timeline.

“Although the federal government recently extended the submission deadline to December 14, we were prepared to meet the original deadline and decided to submit the application as planned to keep the timeline on track," April Todd-Malmlov, executive director of the Minnesota exchange, said in the statement.

To move quickly, Minnesota’s exchange would likely represent a more barebones approach that will be built up later, Sen. Tony Loureyhas said in the past. He was named chairman of the Senate Health and Human Services Committee on Thursday.

Lourey said he would likely sponsor the exchange bill in the state Senate, calling it “one of the big-ticket items” of the session.

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Health Care Law (PPACA)

It would be nice to know how much this is going to cost the State in the out years. It is my understanding that because Minnesota has opted to create its own Exchanges, it will be the States responsibility to cover the expenses whereas if the Federal Gov't set up the Exchanges, it's the Feds responsibility. Can anyone clarify this?