Minnesota sent a blueprint for its health insurance exchange to the federal government Friday, signaling its plans to create its own system tailored to the state.
Under the Patient Protection and Affordable Care Act, or “Obamacare,” states are required to set up exchanges that allow individuals to shop for and easily compare insurance plans. States can design their own or opt to have the federal government set up the exchange.
“It’s like a Travelocity concept,” said Sen. Tony Lourey, DFL-Kerrick, who will chair the Health and Human Services Division Committee this session. “There’s individuals and additional tools beyond the online if those aren’t working for people, but the starting point would be the online system.”
For University of Minnesota students, many of whom are on their parents’ plans or the University’s health insurance, the exchange may have little impact.
“It will provide another option for health care coverage, and I think it will make most difference to those students who are living on their own and not considered a dependent on their parents’ policies,” said Lynn Blewett, the director of the State Health Access Data Assistance Center and a professor at the University.
Blewett said the exchange is targeted to the uninsured, those without employer coverage and small employers.
According to a 2011 report from the Minnesota Department of Health, about 9 percent of Minnesotans didn’t have health insurance in 2009.
People with incomes up to four times the federal poverty level, so up to $44,680 for an individual, will qualify for premium support from the federal government on a sliding scale.
Many students choose to remain on their parents’ insurance plans, and the Affordable Care Act allows that option through age 26.
Others opt for the University student health insurance plan, which costs $950 per semester.
Carl Anderson, chief operating officer at Boynton Health Service, said he doesn’t think the exchange will impact the University’s plan.
“It does give people one more choice,”Anderson said. “We still feel like our plan is going to be a much better value than anything on the market.”
He said lower administrative costs and a healthier risk pool allow the University to keep the cost low in comparison to other plans and warned that plans in the open market would likely have high deductibles.
“We encourage people to get help shopping for plans,” Anderson said.
The University’s insurance plan likely won’t show up on the exchange, Anderson said.
“So far everything I’ve been informed is that we can’t get into the listing for the exchange, so that makes it a little more challenging for us to communicate and market our value.”
Up and running by October 2013
The state has been moving ahead with plans for the exchange, but now the Legislature needs to determine governance structure and financing mechanisms.
The exchange has to be up and running by October 2013 and fully functional by January 2014.
“These are tight deadlines to meet, and I think we’re up to it, but we’re going to have to be efficient with our committee time,” Lourey said.
He said by March he would aim to have some governance established “so that we have some entity with authority to start putting the nuts and bolts together.”
John Pollard, spokesman for Minnesota Management and Budget, said the blueprint sent Friday indicated to the government that the state is working on the exchange and that it will be ready in time.
According to the Kaiser Family Foundation, 16 states and the District of Colombia will establish state-based exchanges and 15 states are planning on letting the federal government set up their exchanges.
Unlike neighboring Wisconsin, which will leave the exchange up to the federal government, Minnesotans have emphasized the importance of having a system created in the state.
“In Minnesota we believe that we need to make a Minnesota product that works for Minnesotans,” Pollard said.
Lourey echoed those sentiments.
“In Minnesota, we have the ability to draw on all these tools and resources that we have and make sure that it is a really well-functioning insurance exchange,” he said. “The alternative is a one-size-fits-all fit generically for the nation.”