Legislation that would create a new online marketplace for Minnesotans to buy health insurance will be making its last state Senate committee stop this week.
More than a million residents are expected to use the so-called insurance exchange as a Web-based gateway to comparison shop for coverage and enroll in government plans. But in order for the exchange to open for business in October as required, state lawmakers must pass a bill by the third week in March.
The complex and controversial legislation to create a Minnesota exchange is moving through committees with remarkable speed.
Sen. Tony Lourey, DFL-Kerrick, who is shepherding the bill through his chamber, even seems a bit surprised by the progress.
"We introduced, and intentionally, a fairly bare-bones bill that left a lot of work for the Legislature to do," Lourey said. "And we have taken that very seriously and really fleshed out a lot of the details that were needed."
Some of the details had the potential to derail the legislation.
One of them was the question of how to pay insurance brokers selling plans on the exchange. While many consumers will comparison shop for policies on the website themselves, others, particularly small businesses, will go through brokers.
Traditionally, insurance companies pay a commission to brokers. But the original bill called for the exchange's board to decide how and what brokers would be paid, and the brokers strenuously objected.
Lourey worked out a deal that allowed them to keep receiving commissions from carriers for the plans they help sell. In return, Lourey said, brokers agreed that before they represented plans on the exchange, they would first get additional training and also disclose to consumers their financial relationships with insurers.
"That was a big step in terms of trying to manage the opposition that we face," Lourey said.
Lourey's counterpart in the House, Rep. Joe Atkins, DFL-Inver Grove Heights, said there was another bipartisan breakthrough in the House version of the bill. A provision calling on the legislative auditor to review the online marketplace annually eased a lot of concerns, Atkins said.
"When you talk about an entity that we expect in the neighborhood of $3 billion in health premiums to go through, a new kind of spin-off of a state agency, and a startup," he said, "it's important to have good oversight. And having an audit done by the legislative auditor makes a great deal of sense."
But potential roadblocks still loom.
One is whether the exchange's board should have the power to bar a health plan from being offered on the exchange. Insurance carriers oppose that option, saying any plan that meets state standards should have a place on the exchange.
But both bills right now would give the board the final say on which plans the exchange offers. Atkins still thinks that is a good policy.
"You'd still have one final step and that would be to ensure maximum quality, affordability -- something that fits consumer needs," Atkins said.
Another likely sticking point is how to fund the exchange's operations when the state is on the hook financially starting in 2015.
Federal grants will fund the exchange through 2014. But after that, the state is considering financing options including tapping its general fund; raising taxes on smokers; putting a fee on insurance carriers who will likely pass that on to consumers; and charging for advertising.
Right now the House and Senate bills differ on funding -- the Senate bill would use an existing tobacco tax; the House bill would withhold a fraction of premiums for plans sold on the exchange.
Still, state Budget Commissioner Jim Schowalter, who is leading the planning and creation of the exchange, is confident that lawmakers will have a bill for the governor to sign by the end of March.
"[There are] still some more committees to go," Schowalter said. "But what [the legislative process has] done is brought out a lot of ideas, a lot of debate about ways to make it better. And I think the legislation is on track, and it looks like we're going to be able to have a Minnesota-based exchange."
If lawmakers fail to approve the exchange by March 31, the state would have to accept an exchange operated at least in part by the federal government.
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