March 1, 2013

Health Insurance Exchange Update

The Health Insurance Exchange bill, House File 5, is headed to the House floor for final passage on Monday.  I expect the bill to pass after several hours of partisan debate.  The Republicans are expected to offer several amendments to the bill.  Most will not be adopted.   Once the House passes the bill, the Senate will act upon their version of the bill later in the week. 


On Tuesday evening, the House Ways and Means Committee added a significant amendment to HIX bill to address the contentious issue of the so-called "active purchaser" model.  Under the active purchaser, the HIX board would have the authority to select the health plans that will be offered through the exchange.


The Minnesota Council of Health Plans and the Minnesota Chamber of Commerce both oppose this broad authority and prefer an "any willing plan" model.  This would allow any plan that receives certification at one of the new federally required actuarial levels, (bronze, silver, gold and platinum levels and a catastrophic plan for those under 30) to be sold through the exchange. This has been a very controversial issue for several weeks.


The author of the bill, Rep. Joe Atkins, successfully offered an amendment that he viewed as a compromise. This amendment was adopted with support of both Democrats and Republicans. The most opposition came from liberal Democrats who strongly support the active purchaser model. 


The new amendment states:

  • No health carrier shall be required to participate in the Exchange.
  • For 2014, all carriers that are certified by the commerce department as qualified exchange plans may participate in the Minnesota HIX.
  • In 2015, for those carriers that opt to participate, the HIX Board shall approve two health benefit plans, one of which must be the most popular plan that the carrier offers at each of the bronze, silver and gold actuarial value as well as catastrophic plan in the individual and small group market.
  • The most popular plan is determined by the highest enrollment (number of lives) inside and outside of the exchange during the previous year (2014).
  • A health carrier or its parent organization that offers health plans within the exchange must offer health benefit plans at the silver and gold actuarial level outside the exchange for individual and small groups.
  • Beginning in 2015, the HIX board will have to power to select health benefit plans in addition to the two required for participating carriers that the board believes offer optimal choice, value, quality and service.
  • The board has the authority to decertify carriers and health benefit plans that fail to maintain compliance with the Affordable Care.

Neither side of the argument was particularly happy with this new language, but several Republicans who oppose the active purchaser suggested that this is better than the bill's original language.  Perhaps this is a step in the right direction.


Surcharge on Auto and Homeowners Policies Proposed to Fund Pensions:


A bill, House File 857 and Senate File 935, has been introduced at the behest of the police and firefighters pension lobby, to require a $5 surcharge on each homeowners and auto insurance policy sold in the state.  The funds would be directed to fire and police pension aid accounts, which would be created under the proposal.  These accounts would be overseen by the Public Employees Retirement Association.


The bills have been introduced by Representative Joe Atkins (D - Inver Grove Heights) and Senator Sandy Pappas (D- St. Paul).  Each policy would be assessed the $5 surcharge annually and the surcharge must be separately stated on policy billings, declarations or other information provided to policyholders. 


This is a very creative way to fund public pensions.  I assume the proponents will attempt to make a link between fires and auto accidents and the duties of police and firemen. 


Here is a link to the bill:



Dominic Sposeto

MIIAB Lobbyist  


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