Nonprofit, independent journalism. Supported by readers.


Minnesota health-exchange bill clears first of many committee stops

The exchange legislation, with a late-March deadline, likely faces a dozen similar legislative hearings and hours of floor debate.    

DFL Sen. Tony Lourey, the exchange bill's chief Senate author, outlines the legislation before lawmakers on Wednesday.
MinnPost photo by James Nord

The Minnesota health insurance exchange’s sprint through the Legislature got off to a good start Wednesday, clearing its first Senate committee.

The exchange legislation, with a late-March deadline, likely faces a dozen similar legislative hearings and hours of floor debate.              

Private stakeholders, state officials and lawmakers have been slogging through preliminary exchange design and planning for some time. And now legislators are poised to act, even while still waiting for important federal guidelines.

“It really does feel good to be actually moving,” DFL Sen. Tony Lourey, the bill’s chief author, said after the hearing in the Senate’s State and Local Government Committee. “We have been working on this for over two years.”

Article continues after advertisement

The exchange, a central mechanism of the federal health reform law, is a DFL priority and passed along party lines, 7 to 5, and was sent to the Senate Judiciary Committee.

The exchange bill will be heard in the House next week.

Gov. Mark Dayton has been steadily moving forward with planning for the exchange, using his executive authority and federal funding. His efforts, which include securing at least $71 million in grant money, were either ignored or criticized last session by Republican legislators.

Now, two years into the project, friendly DFL lawmakers are in place to move forward with a Minnesota-based exchange. Federal officials granted the exchange conditional approval in late December, and the state is waiting on a pending $39 million grant.

According to exchange supporters, the insurance marketplace would serve roughly 1.3 million Minnesotans and could save $1 billion in health care costs. It would allow consumers and small businesses to compare and purchase insurance using a platform similar to travel websites like Orbitz and Travelocity.

Early cost estimates for the exchange are $48 million in 2014 and up to $62 million by 2016, but state officials said those figures would soon be revised. In Lourey’s bill, the state’s share of exchange funding would come from a withholding of up to 3.5 percent on insurance premiums.

Exchange would open in October

The exchange must be open for enrollment in October and fully operational by the beginning of 2014.

The Dayton administration is working to design the intricate IT infrastructure that will power the exchange while lawmakers flesh out the policies that will control it.

Republicans say the exchange is a costly piece of policy that won’t help reduce ballooning health care expenses. Senate Minority Leader David Hann, a Republican lead in health policy, has been a strong opponent.

Article continues after advertisement

Dayton and other Democrats say a state-based exchange would allow more flexibility than federal options. They must pass policy legislation by the end of March or risk ceding authority to the feds.

The complicated exchange issue has a lot of stops to make before final passage. Lourey said the measure might be reviewed by seven committees in each chamber.

“These are very, very significant issues regarding a huge part of Minnesota’s economy,” Lourey told the Senate committee.

During committee debate, GOP lawmakers criticized its proposed governance structure and conflict-of -interest policies. One provision would prevent members of the seven-person governing board from having been paid by an insurance company or health care provider within a year of joining.

“This conflict-of-interest issue is important because it is literally going to prevent the very kinds of people who have experience and expertise in the area from serving on this board,” said Republican Sen. Dave Thompson, who voted against the proposal. “That makes no sense at all.”

Progressive groups are pleased with the consumer-focused governance. Liz Doyle, associate director at TakeAction Minnesota, a grass-roots advocacy organization, called the conflict-of-interest standards “very reasonable.”

Plan draws criticism

Republicans also criticized the board for having too much authority, and business groups said there wasn’t room for meaningful public input in its decision-making — even after Lourey amended the legislation.

“It’s just kind of this behemoth out there that can run our health care system with no accountability back to the people,” Thompson added. “Very disturbing.”

But Lourey rejected Republican criticisms that the bill was moving forward too quickly.

Article continues after advertisement

“I did have a bill … last year that had many of these same components, a similarly structured bill, and have been engaged in the task force for nearly two years,” Lourey said. “These conversations have been going on for a very, very long time. I guess I come from a different vantage point than they do.”

Even with the support of DFL legislative leadership and the governor, the exchange will likely face its share of bumps.

DFL Sen. James Metzen, chairman of the Senate Commerce Committee, held an informational meeting on the exchange a few hours before his colleagues approved it. He brought up some of the same criticisms that Republicans ultimately voiced.

Metzen also indicated that changes are likely when it gets to his committee.

“Talk to people,” Metzen told members of his committee as it adjourned. “Come up with ideas to make this a better bill.”