March 20, 2012

Counter Insurance Exchange Proposals Introduced

 Two key Republican leaders have introduced legislation that appears to present two different ways for the Minnesota State Legislative to respond to the issue of a state health insurance exchange as mandated by the Affordable Care Act.  While supporters of the proposals are careful, mostly for internal political reasons, to suggest that this legislation is directly related to health insurance exchanges, they are clearly designed to take the exchange debate in a different direction. 


One bill, Senate File 2255 introduced by Senator Chris Gerlach, is referred to the as the "null bill".   It attempts to regulate "health benefit intermediaries" (read as health insurance exchange). The bill lists 18 activities that would be prohibited under state law including bearing any risk, negotiating premiums, defining the small group market to include employers over 50 employees, prohibit insurance producers from acting as navigators, and using any taxpayer funds to advertize or promote the intermediary.   The bill also would prohibit a Minnesota health carrier from issuing a health insurance policy if it is subsidized by the state or federal government and is purchased through a market intermediary (exchange). Clearly, this bill sets up a very counter exchange proposal and likely would not be acceptable to the governor.


Another bill, Senate File 2313 authored by Senator David Hann the Senate Republican's lead on health care reform, takes a different approach.  This bill creates "unified personal health premium accounts" which are defined as trust accounts created for the purpose of receiving funds from multiple sources for the payment of health insurance premiums. These accounts could accept funds from employers, account owners, individuals, family members and the government via subsidies. 


The trust accounts could be set up and administered by licensed insurance producers, vendors of risk management services, banks or credit unions.  The account administrators shall create and maintain records of receipts, payments and other transactions that will let the individual benefit from federal and state tax advantages for health insurance premiums.  Products paid for through these accounts are not to be considered employer-sponsored plans subject to state or federal group insurance requirements. 


For the purpose of these accounts, qualified health insurance would include individual medical and high deductible plans including those compatible with health savings accounts, as well as, cancer, accident, critical illness, short term disability, and long term care policies.  Funds contributed by an employer will remain available to an account holder after his or her term of employment has ended. 


Senate File 2313, would repeal current law that prohibits both agents and employers from breaking apart small employer plans to provide individual coverage for employees. It would also establish a Health Insurance Marketplace Website Task Force to identify Internet based tools for purchasing health insurance. 


This bill clearly sets up a mechanism in which the state might be able to participate in the Affordable Care Act without the establishment of a health insurance exchange. This decision would have to be made by the Center for Medicare and Medicaid Services.  That is assuming that this legislation passes and is signed into law by the governor.  A pretty big task!


Dominic J. Sposeto

MIIAB Lobbyist  

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