Dayton Signs Law for Online Health Insurance Exchange

One in five Minnesotans is expected to use the new online marketplace, called MNsure, according to the governor’s office, but some groups are concerned about its control and financing structure.

Legislation that Governor Mark Dayton signed into law Wednesday will allow Minnesotans to buy health insurance through an online marketplace called MNsure.

The new health insurance exchange was prompted by the Affordable Care Act, which the U.S. Congress passed in 2010. It mandates such exchanges but granted states the choice to build their own or face a federally imposed version. Legislation for a state-built exchange recently passed the Minnesota House and Senate, and the bill was signed by the governor Wednesday.

The MNsure website will allow Minnesotans to search for and compare health plans based on a number of criteria. In addition, it will provide a toll-free hotline and in-person assistance to help Minnesotans select coverage.

Roughly 1.3 million Minnesotans, or one in five, are expected to use MNsure to access health coverage, according to Dayton’s office. An estimated 300,000 previously uninsured Minnesotans will gain coverage through MNsure by 2016, it added.

Business groups, however, have criticized the new marketplace, and media reports indicate that no Republicans voted in favor of the legislation in the House or Senate.

The exchange will be governed by a seven-member board, comprising the state’s commissioner of human services and six members appointed by the governor. The exchange will have a projected annual operating budget of about $64 million, and it will withhold a portion of premiums from policies sold in the new marketplace in order to cover expenses, Minnesota Management and Budget spokesman John Pollard told Twin Cities Business by e-mail.

The Minnesota branch of the National Federation of Independent Business, which represents the interests of small-business owners, recently said in a statement that the law will lead to higher premiums for individuals and small businesses, and it will “worsen the disparity between what small businesses and individuals have to pay in terms of health insurance assessments and taxes and what large self-insured business have to pay.”

Kate Johansen, who focuses on health care and transportation policy for the Minnesota Chamber of Commerce, told MinnPost last month that the chamber supports building an exchange, but it has multiple concerns with the state legislation, including the exchange’s governance structure, how to finance it, and who will be held accountable if the exchange doesn’t serve consumers’ interests.

Pollard said, however, that the state believes it will withhold a smaller percentage of premiums than that which will be withheld under the federal model, which Minnesota would have used if it hadn’t created its own exchange. And individuals purchasing policies through the exchange will receive federal tax credits that would otherwise be unavailable, he added.

“The goal is to have a healthy competition within the marketplace among plans that could make rates more competitive,” Pollard said.

After federal tax credits, individual consumers using MNsure will see an average 34 percent decrease in premiums, and the new exchange is expected to save Minnesota families and businesses an estimated $1 billion in health care costs by 2016, the governor’s office said.

Open enrollment begins October 1, at which point Minnesotans may review their insurance options; they may begin purchasing coverage through MNsure starting January 1. To learn more about the exchange, click here.

Insurers have until May 17 to submit their plans to the state for approval to sell on the exchange, according to a report by Minnesota Public Radio.

To participate in an upcoming Twin Cities Business-hosted Webinar series that will focus on what employers really need to know about health care reform, click here.