Minn. to turn down $3M in federal grants for health care

The Minnesota agency overseeing a key part of the federal health care law says it'll turn down about $3 million in federal grant funds.

The money is to fund development of a health insurance exchange — an Expedia.com-like online marketplace where consumers and small businesses will be able to comparison shop for health plans.

When the feds awarded Minnesota an additional grant last week towards creating an exchange, there was a question about whether the Commerce Department had the legislative authority to spend all of it.

Combined, federal grants to the state total more than $31 million toward creating an exchange. The problem is that the Legislature authorized commerce to spend only $28 million.

Last week, commerce officials said they were confident they had the flexibility to spend the extra $3 million. But Tuesday, a spokesman said that after closer review and consideration, the department won't be accepting any more than the Legislature approved in 2011.