The debate over a key part of the federal health care overhaul heats up again at the state capitol.
GOP Sen. David W. Hann opposes the health care law and will hold a committee hearing Tuesday morning to discuss insurance exchanges.
The exchanges are online marketplaces to allow consumers and small businesses buy health insurance based on detailed comparisons of competing plans.
Gov. Mark Dayton on Monday said that at some point — not necessarily this year — authorization will be needed from the state legislature to open a Minnesota exchange for business.
"We probably don't have the ability to implement the whole thing but we can get to the starting gate by Dec. 31st," he said.
Dayton did not specify what legislation the administration needs to get an exchange out of the starting gate.
Minnesota Commerce Commissioner Michael Rothman said nothing in the federal health care law requires states to pass legislation to set up their state health insurance exchanges. He said the federal review will be based on other benchmarks.
"It will look at how far along we've built the exchange, the operations, the IT, how far Minnesota is ready and prepared to have its own MN-made exchange, rather than having the federal option imposed on us and certification does not require legislation," Rothman said.
Certification means that the exchange is adequate under the law and the Federal government won't impose its own exchange on a state.
The Dayton Administration has repeatedly said it wants the Republican-controlled legislature's input on creating and designing a Minnesota insurance exchange.
Last year the Legislature defeated a Republican-sponsored bill. As this session gets underway, Republicans still appear divided. When Dayton created an advisory exchange task force last fall, Republicans refused to fill their two seats on the panel.
That offer fell short, said Rep. Steve Gottwalt, R-St. Cloud, chair of the House health and human services reform committee.
"Let's have a meaningful negotiation. We're going to bring our people, you bring your people, and we'll start talking about it. That's not happening," Gottwalt said.
But all that the feds require under proposed rules is that states submit an exchange plan that satisfies four broad criteria: The exchange must be consistent with provisions of the health care law, help low-income users obtain tax credits toward buying insurance; it must serve the entire geographical area of Minnesota; and must have reinsurance — essentially an insurance program to protect against catastrophic losses for insurers that sell their policies on the exchange.
The Dayton administration could meet most of those criteria without authority from the legislature, said Fred Morrison University of Minnesota law professor and an expert on Minnesota constitutional law.
"You could establish an exchange, it's rather like an insurance brokerage; you could create the information systems that are necessary to work that exchange; and you could operate that over the state as a whole," Morrison said. "Those three are easy."
What is not easy, Morrison said, is the reinsurance program. That would require some taxing authority and he doubts an executive order by the governor would be enough.
There could be a way around that, however. Last year the Obama administration said state exchanges that don't meet all the law's requirements could win conditional certification well into next year. In addition, the federal government would help those states fill in the blanks of what they couldn't accomplish through a state/federal partnership.
That scenario could buy some time for the Dayton administration to work with a potentially friendlier legislature in 2013, after this year's elections.