No state is set to embrace the Affordable Care Act as thoroughly as Minnesota, the only one that will implement the "big three" components of health insurance expansion.
That means Minnesota will expand the Medicaid program, develop an online insurance marketplace and offer a basic health program.
It's the third component that really sets the state apart. Only Minnesota has committed to offering a basic health program, a safety net for people who have too much income to qualify for Medicaid, but not enough to afford private insurance. By enacting that third element of the act, Minnesota will take implementation of the federal health care overhaul further than any other state.
Advocates of Minnesota's approach say moving forward on three of the health law's biggest initiatives means far more Minnesotans will have access to affordable coverage. But it also means Minnesota will be a unique testing ground for the various moving parts of the ambitious and complex new system.
"We are really sticking our neck out there to take advantage of all the opportunities that come along with the Affordable Care Act," said Christina Wessel, deputy director of the Minnesota Budget Project. "If we succeed, we can be a shining light for what the Affordable Care Act can do in a state. But that also means that if we don't do it right, we can be a light for what can go wrong as well."
So, what are experts and insiders going to be watching to gauge how well the changes are playing out?
MINNESOTACARE: MINNESOTA'S BASIC HEALTH PLAN
MinnesotaCare, the state's long-standing subsidized insurance program, will serve as the vehicle for the Basic Health Program.
State lawmakers agreed to fund MinnesotaCare through 2014 until 2015, when the federal government makes BHP funding available.
"If we succeed, we can be a shining light for what the Affordable Care Act can do in a state. But that also means that if we don't do it right, we can be a light for what can go wrong as well."
The Minnesota Budget Project's Christina Wessel said the state's decision to preserve MinnesotaCare with adjusted eligibility rules was critical to maximizing the number of Minnesotans who can afford insurance.
"We were already so far ahead [of other states] and if we went with the Affordable Care Act's standard model, we were going to fall backwards," she said.
The state predicts 160,000 more Minnesotans will receive health insurance coverage under MinnesotaCare, with an estimated 70 percent -- or 112,000 -- of them enrolling in 2014. That's on top of the 35,000 people already in the program who meet MinnesotaCare's new eligibility requirements. The question is whether the enrollment system can handle that large an influx with so many other changes afoot.
And Mid-Minnesota Legal Aid's Ralonda Mason wonders if an "affordability gap" will remain for people who earn just a little too much to qualify for MinnesotaCare. Individual coverage sold through the exchange may still be too expensive for them, even with the help of government subsidies.
"People with that income level just don't have much other money left for other necessities like health care," she said. "So I'm very concerned that the assistance ... won't be sufficient to allow people to purchase policies that will really be useful to them."
Another question is cost. The Minnesota Department of Human Services, which administers MinnesotaCare, estimates that federal dollars will cover about 85 percent of the program up from 50 percent, saving the state $157 million in fiscal years 2016 and 2017.
A separate study commissioned by the state confirmed that a BHP could save Minnesota money. But it also showed that the program could cost the state more than $300 million in 2016 depending on how many enroll, the health of enrollees, and how generous the coverage is.
Minnesota plans to spend more than $100 million on developing the information technology that will be the backbone for MNsure, the state's new online insurance exchange, according to MNsure officials. The online marketplace will act as a one-stop shop for Minnesotans seeking to buy their own insurance, for small businesses that want to offer group coverage to their employees, and for people enrolling in government health plans.
The technology will have to sort out whether a person qualifies for Medicaid, the Basic Health Program or commercial insurance. For people who don't qualify for a government program the software also has to determine if their income makes them eligible for a public subsidy.
"This is a big gamble. I can't say [if] it's going to succeed or not," Gov. Mark Dayton said last March on Minnesota Public Radio's Daily Circuit program. "It's a huge undertaking. It's a gargantuan software issue to try to put all this information about all these providers ... and have it be current and accessible, and understandable. It's staggering."
But so far, officials with big health insurers that are proposing to sell plans on MNsure are not expressing concerns about the technology working.
Persuading uninsured people to enroll in a health plan is key to achieving the primary purpose of the Affordable Care Act: expanding coverage to as many people as possible and making insurance affordable.
"This is a big gamble. I can't say [if] it's going to succeed or not... It's a huge undertaking."
Enrollment also is the economic lynchpin for the new insurance exchanges. The more people who buy health coverage though the exchange, in particular the more healthy people who enroll in health plans, the more money there is in the system to pay for the health care services of people who need them. If only relatively sick people buy health insurance, premium rates could increase dramatically. Enrollment would likely decline in response, defeating the purpose of the law. That's why the law includes the "individual mandate" requiring almost all citizens to have health insurance.
And some health insurers, including the nation's biggest, Minnetonka-based UnitedHealth Group, have voiced concerns about the health of people enrolling. CEO Stephen Hemsley recently said the company will sell plans on only about a dozen state exchanges, and is otherwise taking a "watch and see" approach.
The first people to get subsidized coverage through the exchanges are likely to have "a pent-up appetite for insurance," and may have "a higher risk profile," Hemsley said.
Translation: We don't like the economics of exchanges in the early stages.
It's not clear how the carriers' betting is playing out when it comes to Minnesota, but the market is apparently attractive enough for the nine insurance companies proposing to sell plans on MNsure. The state has not named the companies or released any information about their insurance policies, in accordance with state law.
With a few exceptions, people who don't qualify for Medicaid or MinnesotaCare are still required by law to get coverage, but there are questions about whether the law's teeth are sharp enough.
Phillip Cryan, SEIU's Healthcare Minnesota organizing director and former member of the state's Health Insurance Exchange Task Force, worries that wealthier and healthier people who lack insurance -- but who don't qualify for large government subsidies -- won't sign up as a result.
"The carrots in the Affordable Care Act are really substantial for people who are low income to moderate income ... and that will bring a lot of people into the new exchange and into health insurance coverage," Cryan said. "The sticks, as it were, in the individual mandate -- the penalty that people will pay if they do not buy coverage -- are not very substantial."
People who decide to remain uninsured will pay a fine of $95 or 1 percent of their household income next year, whichever is greater, and the fees increase every year before topping out at $695 per uninsured adult or 2.5 percent of household income in 2016.
To convince 1 million Minnesotans to obtain health coverage, MNsure will spend roughly $1.5 million on advertising targeted at populations that stand to benefit most from the new law, according to MNsure.
MNsure also has grant funding for organizations willing to educate potential enrollees about the exchange, and help them navigate it.
But there are questions about whether that outreach effort will be sufficient or effective. MNsure will pay only $25 per enrollment in a government health plan, compared to $70 for enrollment in a commercial health plan, at least initially. Some organizations that already help people enroll in public health plans say the $25 payment falls far short of their actual cost, which can reach $300.
There have also been complaints that the outreach effort is excluding vendors with experience in marketing to African-Americans.
And market research indicates the uninsured are not necessarily favorably disposed towards health insurance.
"There's a low level of trust among a lot of the uninsured, especially," said market researcher Peter Mitchell who surveyed attitudes for the Minnesota Governor's Health Care Reform Task Force in 2012. "So you have a skeptical public," he said.
Many businesses owners still aren't sure what the exchange is all about, said Rhett Buttle, VP of External Affairs for Small Business Majority, a national advocacy group for small businesses. But when they learn more, they like what they hear, Buttle added.
"Small business owners for a long time have really struggled with the rising cost of health care, and even just the ability to obtain health care for them and their employees, so the marketplace is attractive," he said.
But that view is far from universal. Mike Hickey, Minnesota state director for the National Federation of Independent Businesses, an organization that filed a lawsuit challenging the constitutionality of the Affordable Care Act, said a lot will depend on whether a business is eligible for a tax credit. The subsidy is only available to some businesses that employ fewer than 25 full-time employees.
"I don't think [others] will be interested in perusing the exchange," Hickey said. "They could really accomplish the same through an independent agent."
Employers with fewer than 50 employees face no penalty if they refuse to offer health coverage. And the Obama administration recently decided to delay a $2,000-per-worker penalty (after the first 30) on larger employers that refuse to provide health coverage.
Mason of Mid-Minnesota Legal Aid welcomes efforts underway to streamline the insurance application process. For instance, people seeking Medicaid, MinnesotaCare or federal subsidies for the individual market will use a single application, and that's "a very good thing," said Mason.
But she warns that the new application must be straightforward.
"We have the opportunity to simplify the application process," Mason said. "Those are some decisions that are in the process of being made, so how well we do that will influence how successful we are in getting people enrolled."