As legislators work in conference committee to finalize Minnesota’s health insurance exchange, their decisions will serve either small businesses that are being crushed under the weight of insurance costs or an insurance industry with skyrocketing profits.

When the federal Affordable Care Act (ACA) was passed in 2010, it stipulated that each state must develop such an exchange. Exchanges centralize insurance plans into an online “marketplace.” Ideally, they create a one-stop shop where individuals and small businesses can easily compare and buy quality plans. It is estimated that Minnesota’s exchange will serve 1.2 million people.

States have great latitude establishing exchanges. If developed correctly, an exchange can make buying insurance easier while lowering costs and increasing quality. It can foster competition and encourage providers to place a greater emphasis on value and affordability.

Conversely, millions of taxpayer dollars could be misdirected to give the insurance industry free advertising and access to hundreds of thousands of new customers.

Key to serving Minnesotans is the active-purchaser model. The state must actively select insurance plans for its exchange. Active purchasers can foster competition between insurers that want access to new customers and billions in sales while protecting the interests of small businesses by ensuring that plans offer the best coverage for the best price. The model also can ensure ongoing quality improvement and innovation, as opposed to plans that simply meet static or minimal criteria.

However, highly paid lobbyists are influencing legislators to allow all plans that meet minimal, static criteria into our exchange. Not only does this threaten competition, quality and continual improvement, it allows the exchange to be flooded. Market flooding is a gimmick to create so many choices that consumers’ selections become somewhat random. This lessens the need to compete on quality, price or other values.

The Senate has held steadfast to active-purchaser tenets. Meanwhile, the House, after eight committee approvals, introduced an 11th-hour amendment to greatly dilute the model by allowing 88 plans into our exchange that simply meet minimal standards.

The conference committee must keep a strong active-purchaser model in place.

Our exchange will be overseen by the Legislature and a board of qualified individuals who have been appointed by the governor and approved by the Senate and House. Minnesota’s exchange bills include conflict-of-interest rules. However, lobbyists have convinced some legislators to let those who benefit financially from the exchange to oversee it.

The conference committee must maintain strong conflict-of-interest rules.

Today an insurance plan costs the consumer the same whether purchased online or through a broker. Yet, the broker still gets paid. With this reality in mind, the original exchange bills required insurance companies to pay a nominal fee for access to the exchange. Lobbyists and their aligned legislators are, however, pushing for taxpayers to pick up these business costs and further deplete the state’s general fund.

The conference committee must keep the costs with the industry that will gain profits, not burden the taxpayer.

It’s time to level the playing field. Lower-priced, better-quality health insurance is common in large businesses. Meanwhile, even though small businesses are collectively Minnesota’s largest employer, access to affordable health insurance is disproportionately expensive or even cost-prohibitive. They do not have big business’s bargaining power or the ability to self-insure.

Small-business owners rarely have the expertise, time or resources to sift through hundreds of plans. In addition, since most have an annual salary of less than $100,000, they cannot afford a lobbyist.

Small businesses need access to affordable insurance in order to thrive. Being able to offer health benefits can be key to attracting and retaining top talent, and it can make the difference between staying open or closing the doors.

Members of Small Business Minnesota have been at the State Capitol testifying for the principles laid out in this article. We have not heard from any small-business owners outside the insurance industry who oppose this stand.


Small Business Minnesota is a statewide, nonprofit, nonpartisan membership association. All members are Minnesota small-business owners with fewer than 100 employees. Its mission is to use factual information to voice the true needs of small businesses in Minnesota.