The Free Press, Mankato, MN

Editorials

December 1, 2012

Our View: Exchange oversight must have business input

— Minnesota's state health insurance exchange is starting its slow path to federal approval and it's going to be more expensive than previously thought.

The exchange is part of the federal health care overhaul, commonly called Obamacare, which is an insurance marketplace where consumers and small businesses comparison shop for health insurance policies. It is supposed to be in place next year with coverage taking effect in 2014. While many states are behind in applying for the exchange, Minnesota has applied and is seeking a total of $110 million from the federal government to just develop the exchange.

A governance structure is slated to be approved by March 31 or the state will default to a federal exchange, although there is some suspicion extensions would be granted if there is a good faith effort being shown.

Earlier estimates on the cost of such an exchange of $40 million now are being projected to cost $64 million in 2016 when the state exchange is supposed to be self-sustaining. As of yet, there are no plans for how it will pay for itself and this is where the opportunity lies for Gov. Mark Dayton. Like it or not, the courts have spoken and the results of the recent election seem to confirm Obamacare is here to stay. Realizing that, we need to ensure this does not become a financial albatross for taxpayers.

Dayton seems to want multiple stakeholder input in overseeing the exchange, which is wise. Besides the obvious choice of health care professionals, he needs to pull in experienced business people who have management experience and can clearly frame the exchange in business terms.

The outcomes need to be determined on markets and business applications and not politically nice ideas. Minnpost reported that already within the DFL, there are fractures between what it termed pragmatists and idealists.

For instance, DFL Sen. John Marty has said he would push for advocates rather than industry professionals to lead the exchange. This could turn off other stakeholders and limit participation in the exchange. This would be a huge mistake since the success depends on people actually using it.

Critics are quick to point out the success of exchanges depends on them being patient-centered and market-based to provide good choices and good value. The more coverage looks like it is restrictive, beneficial to just a few or stifling insurer competition, the more likely it will fail.

Business people are keenly aware of developing products people will use profitably because failure is often not an option.

It's also incumbent upon this board to ensure not only that the exchange is easy to use but that they market the exchange wide on how it works and what benefit exists in using it. Just giving people a choice doesn't mean they will do it wisely as the shift from pensions to Individual Retirement Accounts have shown.

If we do not treat the exchange as a viable and self-sustaining entity designed with business acumen, it will become a very expensive taxpayer-funded entitlement.

 

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