Allowing individuals to buy health insurance from out-of-state carriers is not just a free-market Republican idea to increase competition and try to bring down premiums.
This afternoon, state Rep. Joe Atkins, DFL-Inver Grove Heights, will present his plan to open up Minnesota’s individual health-insurance market to out-of-state carriers. At the same committee hearing, Rep. Laura Brod, R-New Prague, will offer legislation [PDF] that Republican Gov. Tim Pawlenty has been pushing since last year.
“I’ve been thinking about this for a while,” Atkins said, “but I don’t quite have the bully pulpit of the governor. But I do have the ability to introduce actual legislation, and I think it’s important to enhance competition and hopefully drive down costs.”
Atkins said the key difference between the bills is that his proposal requires that out-of-state insurers abide by Minnesota’s consumer protection laws. “Under the other bill, they’re exempt from multiple consumer protection laws,” he said.
Brod did not return a phone call from MinnPost.com. Language in her bill authorizes the commissioner of commerce to identify potential insurers in states that would have an “acceptable degree of consumer protection.”
‘A level playing field’
So, why not just work with the governor?
“I haven’t talked to him (the governor) about it, but I think he’d like mine, too,” Atkins said. “He’s a hockey guy, and I think he might want there to be a level playing field for all the folks on the ice.”
Atkins is chairman of the House Commerce and Labor Committee, but his bill and Brod’s will be heard this afternoon by the House Health Care and Human Services Policy and Oversight Committee.
It will be a busy afternoon for Rep. Paul Thissen, DFL-Minneapolis, who chairs the policy and oversight committee. Besides the DFL and GOP proposals to open up Minnesota’s health insurance market, the committee will consider two bills — one from a DFLer, the other from a Republican — that take aim at potential waste, fraud and abuse of public health programs. Another bill, from Republican Rep. Steve Gottwalt, wants to set up a defined contribution program for MinnesotaCare, a premium-based plan for low-income residents.
Isn’t that a fairly packed agenda?
“We’re going to start at 1 and go to 4:15,” Thissen said Tuesday evening, noting that we’re discussing health care while he’s dining on White Castle. “To me the most important thing is to give these things a hearing so we find out what the pros and cons are instead of making assumptions about the pros and cons.”
An issue in Congress as well
Last year, Pawlenty announced that he wanted Minnesota to become the first state to let residents buy health insurance from out-of-state carriers. The idea is also being floated in national reform.
“There is no reason a Minnesotan should not be able to buy health insurance from other states,” the governor wrote in a recent op-ed piece in the Washington Post. “Doing so would dramatically increase insurance choices and cut costs through improved competition.”
Pawlenty’s plan isn’t going over well with Minnesota’s nonprofit health-insurance plans.
“The issue here for us is that the governor’s proposal takes away the level playing field that we think is an important protection for consumers,” said Julie Brunner, executive director of the Minnesota Council of Health Plans. “We think there’s a fair amount of competition in the market in Minnesota, and if the governor wants to spur competition through bringing in out-of-state companies, then make those companies meet all those requirements and then we’ll see where the competition is.”
Thissen doesn’t expect that either of the proposals “will change significantly the market in Minnesota.”
Simulation found few takers
In fact, a simulation conducted a few years ago found that only 2 to 3 percent of Minnesotans would buy their health insurance from an out-of-state carrier, said Stephen T. Parente, a health economist who ran the simulation for the federal government. But 45 percent of people in New Jersey would be inclined to go out of state, said Parente, an associate professor of finance in the Carlson School of Management, University of Minnesota.
“Minnesota’s premiums are not that high compared to other states … that have much more aggressive regulations — like New York and New Jersey, where they have guaranteed issueance laws … which become very expensive,” said Parente, who was a volunteer health adviser to John McCain’s presidential campaign.
Another concern for Thissen would be the extent of consumer protections in either proposal. “If an insurance company doesn’t properly honor its policy with you … if the insurer is registered in Minnesota, you can go to the Department of Commerce and get relief. If the company is registered in Alabama or Delaware, you have to go there to get relief,” he said. “That’s very significant.”
Waste, fraud and abuse
Also on today’s agenda are a GOP plan to examine billing and collection practices of state public health programs to “reduce waste, fraud and abuse” and a DFL plan to create an Office of Health Care Inspector General in the Department of Human Services “to enhance antifraud activities and to protect the integrity of the state health care programs.”
“There are some indications that a percentage of public programs are being spent for people who don’t really qualify and that we may be overpaying some providers for some procedures,” Thissen said. “We want to make sure we’re using public dollars … as wisely as possible.”
Though there are competing proposals from both parties about the same issues, Thissen thinks it’s worthwhile to hear all of them.
“The thing about health care is that no one has a corner on the market for the right idea,” said Thissen, a DFL candidate for governor.
Today’s hearing is scheduled at 1 p.m. in Rm. 200 of the State Office Building.
Casey Selix, a news editor and staff writer for MinnPost.com, can be reached at cselix[at]minnpost[dot]com. Follow her on Twitter.