ST. PAUL — More than 300,000 uninsured Minnesotans will have a route toward health coverage under a bill the state Senate passed Monday, the final legislative step toward implementing one of the major features of the new federal health care law.
The Senate approved the health insurance exchange bill on a party-line vote of 39-28. They sent the bill to Gov. Mark Dayton, who has vowed to sign it and whose administration has already been working for months on setting up the venture and hiring its employees ahead of a planned Oct. 1 enrollment date.
The centerpiece of the plan is the health care exchange, a website where individuals and small business owners can compare and purchase private insurance plans. By 2016, according to initial projections, about 1.3 million Minnesota residents will get insurance through the exchange. In addition to the 300,000 who are uninsured — who will get federal subsidies to help purchase coverage — another million Minnesotans will either transfer to the exchange from existing medical assistance programs, or through their employer.
"We finally get a plan that will hopefully give health insurance access to a lot of Minnesotans at a better price," said Sen. Barb Goodwin, DFL-Columbia Heights.
Republicans, along with business groups and insurance companies, said they fear the new system will increase insurance costs. The $60 million a year needed to fund the operations of the exchange will be covered by a premium tax of up to 3.5 percent on plans sold on the exchange, which critics say will likely to put pressure on insurers to raise premium rates across the board. Some insurance companies also say they don't have enough time to prepare.
"We know our costs are going to go up," said Sen. Michelle Benson, R-Ham Lake. No Republicans voted to approve the final bill.
Once Dayton signs the bill later this week, pieces of the exchange will quickly come together.
The exchange will be a new state agency with about 86 employees, 26 of whom have already been hired. They include the exchange's executive director, April Todd-Malmlov, an economist who previously worked for the state Department of Health before working at UnitedHealth Group.
Other jobs have already been posted online, including one Monday for a "privacy and security officer" that read: "Positions with the Minnesota Health Insurance Exchange provide the opportunity to be involved on the ground floor of a new, dynamic and evolving area of health care access, health insurance policy and operations."
Dayton has until April 30 to appoint a seven-member board that will govern the exchange; one seat automatically goes to the state's commissioner of human services. Board members, none of whom can have financial ties to health insurance firms or medical providers, will earn $30,000 a year for their first two years of service; after that, they will only get a $55 per diem for expenses. The Legislature can vote members off the board.
During the exchange's first year, any Minnesota insurance provider will be eligible to sell its products there. Insurers have to submit their offerings to the state by May 17 — which the companies say will be hard to do.
Blue Cross and Blue Shield of Minnesota — the state's biggest insurer — faces "enormous challenges" to be ready for that deadline, said the firm's lobbyist, Scott Keefer. He said that doesn't leave enough time to meet technological requirements for selling its insurance plans on the state website, which has been compared to sites like Travelocity, where travelers compare plane tickets, hotel reservations and car rentals from a variety of sellers.
While Blue Cross and other major insurers supported the concept of a state-run exchange, they opposed the version that got through the Legislature.
"The law will impact each individual and employer in a unique way, so what Minnesotans ultimately pay for health coverage will vary and depends on a number of factors," Keefer said.
Starting in 2015, the board will decide which providers get to keep selling on the exchange. Those decisions will be made using criteria that includes affordability and value, quality, and promotion of prevention and wellness.
By this summer, Todd-Malmlov said, the exchange will begin a marketing and education campaign aimed at reaching potential enrollees. Under the federal health care law, people who don't have health insurance starting in 2014 will have to pay a federal penalty: either $95, or 1 percent of a person's income — whichever is higher. The penalty would increase in 2015 and 2016.
Todd Malmlov said one of top goals is that the exchange website be easy to use.
"That's what we're working for, is that it be simple," Todd-Malmlov said. "With anything first out of the gate, it's probably not all going to be perfect, there will be bugs to work out. Our goal is to make it as good as it can possibly be, and better over time."