A new online marketplace that will change the way one out of every five Minnesotans buys health insurance cleared a major legislative hurdle Monday.
The House of Representatives voted 72-58 to create a state-based Health Insurance Exchange, a system intended to help individuals and small businesses find the most affordable health-care plans. An estimated 1.3 million Minnesotans are expected to buy coverage through the system.
To its supporters, the exchange will provide affordable health care to hundreds of thousands of people who are currently uninsured or struggling to pay for their own coverage. To its opponents, the exchange is an expensive, slapdash experiment that they fear will drive up insurance premiums for all Minnesotans.
“It really is the most significant health insurance reform that we’ve seen in Minnesota in nearly 50 years,” said Rep. Joe Atkins, DFL-Inver Grove Heights. “The change here is the biggest change we’ve talked about since Medicare and Medicaid went into place back in 1965.”
The bill passed with just one Republican vote. Rep. Jim Abeler, R-Anoka, who co-sponsored the bill despite his qualms about how it would be funded and operate, said he cast his yes vote to get a seat at the table when the bill goes to conference committee.
One Democrat voted against the bill: Freshman Rep. Laurie Halverson, DFL-Eagan.
The exchange is to be up and running next January. Its detractors worry about creating such a massive system, with an expected $60 million budget, on such a tight timetable.
“Welcome to the Democrats’ health care exchange,” said Rep. Kelby Woodard, R-Belle Plaine. “There are three things Minnesotans are about ready to experience. The first one is less choice. The second one is more cost. The third one is no privacy.”
But love it or hate it, Minnesota is getting a health insurance exchange. If the state doesn’t produce a plan of its own by the end of the month, Minnesotans will have to use an exchange set up by, and run out of, Washington.
Atkins argued that the exchange will drive down health insurance costs. Even the cheapest policies in the exchange, he said, will offer better coverage than policies people could find on their own.
“Right now, as a small-business person, it’s really challenging for me to be in a competitive position with health insurers. They kind of have me by the rear end, as far as being able to get a competitive bid,” Atkins said.
An estimated 300,000 Minnesotans currently have no health insurance, and the exchange is expected to offer coverage to 1.3 million people and small businesses.
Setting up a state-based exchange by the end of this year will mean creating a massive computer network that will allow consumers to go online, enter information about their families, finances and health-care needs and then comparison shop between plans and prices. It’s a bit like the online sites that let people shop for the best rates on hotels or plane tickets — if those systems tapped into federal databases and countless health plans and cost more than $60 million a year to operate.
Even Gov. Mark Dayton has concerns about assembling the exchange on the fly.
“This is a big gamble,” he said during a Monday radio interview. “I can’t say it is going to succeed or not. It’s a big attempt, it’s a huge undertaking that’s just gargantuan ... It’s staggering. It’s the law, it’s federal law and we are going to make the best of it here in Minnesota.”
The exchange bill worked its way through at least eight House committees in the past two months and has gone through almost 50 hours of debate. That debate raged on Monday, as legislators offered almost 100 amendments to the bill.
Most amendments were rejected or voted down, but legislators did vote to ban insurance companies from providing abortion coverage through the exchange. The bipartisan vote came over the objection of opponents who said it amounted to politicians meddling in women’s ability to use their own money to buy private health coverage.
It remains to be seen if the abortion amendment survives conference committee with the Senate. Seventeen states currently ban abortion coverage in their insurance exchanges.
Staff writer Rachel E. Stassen-Berger contributed to this report.