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Legislation establishing a state-run marketplace where individuals and small businesses can purchase health insurance is headed to the House floor.

Health exchange bill clears conference committee

Rep. Joe Atkins

Legislation establishing a state-run marketplace where individuals and small businesses can purchase health insurance is headed to the House floor.

A conference committed hashed out the final differences between the House and Senate versions of the bill on Wednesday evening. Rep. Jim Abeler, R-Anoka, the lone Republican on the panel, cast the only dissenting vote on the final report.

Passage was cleared when the chief authors of the bills — Sen. Tony Lourey, DFL-Kerrick, and Rep. Joe Atkins, DFL-Inver Grove Heights — reached a compromise on two critical issues: financing of the exchange and the authority of the seven-member exchange board to determine which insurance products can be sold through the marketplace.

The conference committee largely stuck with the House’s language on financing. That means the exchange, which is expected to cost roughly $60 million annually, will be paid for with a tax of up to 3.5 percent on premiums purchased through the marketplace rather than with general fund dollars, as the Senate had proposed. That fee on premiums will only be 1.5 percent during the initial year of the exchange’s existence, when it will be building a reserve account to protect against unanticipated future costs.

The Senate largely prevailed on the so-called “active selector” language. That means that the exchange board will have the authority, starting in 2015, to determine which insurance products are allowed to be sold through the marketplace. The one-year delay was a concession to the House position, which would have allowed any insurance firm that meets minimum thresholds to sell products through the exchange.

Those decisions will not sit well with the Minnesota Chamber of Commerce and the Minnesota Council of Health Plans, which have argued against both the active selector language and the 3.5 percent premium fee. The business organizations are also displeased with strict conflict-of-interest language that prevents anyone with current financial ties to the health insurance industry or a medical provider from serving on the board.

Once the exchange is fully established, it’s anticipated that nearly 1.3 million individuals will purchase insurance through the marketplace, including 300,000 who currently lack health coverage. About 700,000 of those projected participants are already covered by the state’s Medicaid program.

The House is expected to take up the exchange legislation on Thursday afternoon. The Senate will likely follow suit on Monday. The state faces  a March 31 deadline to enact exchange legislation or risk the federal government imposing its own version of a health-insurance marketplace.

 

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