MNsure role might shrink with ACA repeal

The federal legislation from House Republicans to repeal and replace the Affordable Care Act eventually might create a smaller role for MNsure, the health insurance exchange that Minnesota created in 2013 to implement the federal health law.

Under the bill introduced in Congress this week, individual market shoppers would be able to tap federal tax credits when buying coverage directly from health insurers.

That contrasts with the Affordable Care Act, or ACA, where Minnesotans can access subsidies only when buying through MNsure, which is both an online marketplace for commercial coverage and a system for determining if people qualify for public insurance.

Republicans in St. Paul have long pushed the administration of DFL Gov. Mark Dayton to seek permission from the federal government so that state residents could tap subsidies in the "off-exchange" market.

House Republicans trumpeted the tax credit change this week in a fact sheet about the federal legislation by saying: "Individuals and families will be able to use their existing subsidy to purchase insurance ... off of the exchanges."

Exchanges like MNsure are an option for those buying health insurance in the individual market, where about 5 percent of Minnesotans obtain coverage. The market serves self-employed people and those who don't have access to insurance from their employer or a government program.

The health law brought sweeping changes to the individual market with the idea that many who previously lacked coverage might buy individual policies. The exchanges determine eligibility for federal tax credits that discount premium costs. They also present coverage options in ways that were meant to be more consumer-friendly.

If the bill from House Republicans eventually becomes law, the change allowing tax credits in the off-exchange market wouldn't be a big deal to most people in the near-term, said Karen Pollitz, a senior fellow with the Kaiser Family Foundation.

That's because the subsidies can't yet be provided in advance, meaning the exchanges would remain the only way for tax credits to be used as an upfront discount on monthly premium costs.

The bill calls on a federal agency to figure out a way to make "advance" tax credits available outside the exchange by 2020, Pollitz said.

The Republican bill would result in more consumers buying coverage through health insurance agents or health plans, just like they did before the ACA, said Peter Nelson, a vice president with the Center of the American Experiment, a conservative think tank based in Golden Valley.

"Looking forward to 2020 and beyond, MNsure will likely play a much smaller role in connecting people to private coverage," Nelson said.

Allison O'Toole, the MNsure chief executive, said following a board meeting in St. Paul on Wednesday that exchange officials are still studying the House Republican bill.

In general, she noted the legislation doesn't have a lot to say about the exchanges.

"It's a little premature to start speculating about what the health care landscape is going to look like in 2020," said MNsure spokesman Jeremy Drucker, in a statement.

"The language we've seen in the bill is pretty vague about what the mechanism will be for delivering tax credits to consumers. It could well be that a health insurance exchange is what will be used."

Christopher Snowbeck • 612-673-4744