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Three major health exchange hurdles remain as legislators rush to meet deadline

Conferees did agree to add extra legislative oversight provisions to address issues related to accountability.

Democrats are racing to come together on Minnesota’s most significant health reform in the last half-century, with just days remaining before the deadlines start rolling in.

Health insurance exchange backers say they need to wrap up serious differences in the exchange legislation between both legislative chambers by midnight Wednesday to get the bill to the House floor on Thursday, which has been the goal.

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Lawmakers need to finalize the exchange by the end of the month, but a weeklong break at the close of March is putting pressure on its boosters to pass a bill now.

At least three major issues — perhaps the largest hurdles to overcome — remain:

  • The Senate amended its exchange bill to finance the new insurance marketplace using state tobacco revenues. The House has so far held onto a 3.5 percent premium withhold to fund the exchange, which avoids a general fund appropriation.
  • The House amended its exchange legislation to move more toward a “clearinghouse” exchange, rather than the “active purchaser” model that progressive activists have pushed. Rep. Joe Atkins, the House sponsor, said he’s worried health carriers won’t buy into the exchange without certain guarantees. Senate sponsor Tony Lourey so far hasn’t appeared supportive of the move.
  • House members amended the exchange bill on the floor to prevent plans operating on the exchange from covering abortions. The Senate didn’t make a similar move when DFLers passed the legislation there.
Sen. Tony Lourey
Sen. Tony Lourey

The conference committee has “tightened” the exchange bill so far, according to Capitol watchers but left much of the heavy lifting to the last minute — it’s expected to reconvene Wednesday evening to hash out the remainder of the bill.

Conferees agreed to one of the most controversial measures — related to public input on the exchange’s operations — with a “hybrid-plus” compromise on Wednesday morning. They added extra legislative oversight provisions to address issues related to accountability.

Lourey said the House-Senate compromise allowed “nimbleness” for the seven-member board that would run the exchange while also giving much-needed “sunshine and due process.” Atkins, appearing slightly chagrined, called it a “challenge” to compromise on the issue.

Rep. Jim Abeler, the lone Republican on the conference committee, pushed for more oversight measures, either by designating the exchange as a state agency or putting it under the governor’s authority. Democrats, however, beat the effort back – at least initially on Wednesday.

Kate Johansen, a lobbyist with the state Chamber of Commerce who has been watching the exchange legislation all session, said the committee also agreed to slightly loosen conflict-of- interest standards for the board. That’s been one of business groups’ biggest concerns.

Rep. Joe Atkins
Rep. Joe Atkins

Looking forward, Johansen said it’s difficult to guess how the committee will resolve the financing issue. It does appear likely, however, that the 3.5 percent premium withhold could win out over the tobacco revenue mechanism because none of the senators who voted to remove the withhold were included on the conference committee.

Likewise, there’s a three-person majority from both the House and Senate, Johansen said, that would likely support using the 3.5 percent withhold. The state Chamber opposes that funding source.

Johansen said the administration likely doesn’t want to open up a hole in the state budget, which would happen if tobacco revenues were diverted from the general fund to finance the exchange. But, she said, the withhold opens up lawmakers to a “spin debate on whether or not it’s a new tax.”

It’s also unclear if alternate funding schemes will be proposed or whether they would have any chance of being adopted. Abeler would be the most likely to offer a separate mechanism.

The active purchaser debate — one of the most divisive of the session —is the “most uncertain” to Johansen. Lawmakers are looking to balance business concerns with consumer protection efforts, but Atkins’ move toward a more industry-friendly exchange came late in the game.

It’s highly unlikely whether the House’s controversial abortion language will make it through the process, according to Johansen.

“I would be shocked if that survived conference committee,” she said.