Minnesota should consider ways to make the federal health law work better by seeking an "innovation waiver," a national expert on health insurance exchanges said Friday.
Joel Ario, who previously served as the top Obama administration official for the new insurance marketplaces, told a University of Minnesota forum on Friday that the federal Affordable Care Act [ACA] includes a waiver program so that states in 2017 can start customizing aspects of the health law.
Such a waiver could allow Minnesota to address coverage "cliffs," including the difference in out-of-pocket spending for people covered through public health insurance programs and those who buy private coverage on the MNsure exchange, said Ario, a managing director at Manatt Health Solutions.
People who see their incomes rise just above the cutoff for public insurance, for example, will find private coverage options through MNsure that require much more in out-of-pocket spending should they need care.
"I do think Minnesota should look at whether they can redo the benefits and subsidies to make for a smoother and more efficient and effective coverage continuum," Ario said in an interview. During the forum at the U's Humphrey School of Public Affairs, he said: "I know nobody who thinks the ACA got it exactly right."
In recent months, there's been more talk among policymakers about whether Minnesota should seek a waiver.
When Gov. Mark Dayton in March proposed a task force to look at options for MNsure and the state's public health insurance programs, he mentioned the waiver possibility.
Rep. Tara Mack, R-Apple Valley, has legislation calling for a waiver to provide federal tax credits to people who buy non-group coverage outside the MNsure exchange. Currently, subsidies are limited to MNsure.
Ario said he appreciates arguments on both sides of the issue.
On the one hand, if people can use tax credits outside the government-run exchanges, marketplaces like MNsure might lack the critical mass necessary to actively negotiate prices with insurance companies. This so-called "active purchaser" power hasn't been used by MNsure, but was included in the legislation to create Minnesota's exchange.
"When the exchange has a monopoly on the tax credit, they can build up an enrollment that gives them leverage in the marketplace," Ario said in an interview. "The Republicans, on ideological grounds, say … we don't want these entities with a government monopoly being able to do that."
On the other hand, policymakers might want to let people use tax credits outside the exchange, Ario said, if there are significantly more health insurance options in the off-exchange market.
He's become more sympathetic to that idea with the emergence of private health exchanges.