House passes Health Insurance Exchange legislation
The Minnesota House of Representatives passed HF 5, legislation establishing a health insurance exchange, on a vote of 72-58 Monday night, March 4.
Health insurance exchanges are a key component of the Affordable Care Act. Rep. John Ward, DFL-Baxter, voted in favor of the bill.
“The health insurance exchange will serve more than one million Minnesotans and, most importantly, will be Minnesota-made online marketplace where individuals, families and small businesses will be able to get quality, affordable health coverage that fits their budget,” said Ward.
Enrollment in the Minnesota Health Insurance Exchange begins Oct. 1, 2013, with plan coverage starting Jan. 1, 2014. If Minnesota does not pass legislation establishing an exchange, the federal government will step in and establish it for the state.
“We need a Minnesota-made health care exchange rather than a one-size-fits-all federal exchange,” said Ward. “We can do a better, cheaper exchange if we do it ourselves. A state exchange allows us to control the products, services, and systems so Minnesotans are best served. This will maintain our reputation as a leader in health care.”
Minnesota families are projected to save more than $1 billion by using the exchange to purchase insurance — with the average family saving $500 and a lower-income family saving approximately $1,800. The exchange is expected to help roughly 300,000 uninsured Minnesotans gain coverage by 2016.
Nearly 200,000 small businesses employees are also expected to access coverage through the exchange. Small businesses currently pay on average 18 percent more than large businesses, an average of $11,000 per year for a family coverage. Small employers are projected to save up to 7.5 percent off of premium costs in the exchange and those eligible for tax credits will save even more. Small business owners would be able to choose the plan for their workers, or let their employees choose the plan that’s right for them.
“This exchange can help reduce our skyrocketing health care costs, helping Minnesota families and small businesses in the process,” said Ward. “Health care is often a tremendous expense for families and businesses and anything we can do to reduce those costs will help our economy. These savings will be great for our state.”
The bill funds operation of the exchange by charging health insurance companies up to a 3.5 percent surcharge on premiums of the health plans purchased through the exchange. Exchange staff expects to charge less than 3.5 percent — closer to 2 to 2.25 percent — a federal health insurance exchange would be locked at 3.5 percent.
A number of amendments were offered and accepted during the floor debate. The bill passed off the House floor included an amendment that prohibits any plan sold through the exchange to include abortion coverage, with exceptions made for the life of the mother, rape or incest. Ward voted in favor of the amendment.
The Senate is expected to pass its version of the Health Insurance Exchange bill later this week. The two bills would then go to a conference committee.