Minnesota Legislature Hammers Out Exchange Bill

ST. PAUL, Minn. — The Democratic-majority Minnesota House has passed a key part of the Obama administration’s health care law — a state-based health insurance exchange. The bill’s chief author called the measure the most significant health reform in 50 years. But abortion restrictions adopted Monday could run into trouble with Gov. Mark Dayton, a Democrat.

The full Senate takes up its exchange bill on Thursday. Minnesota won conditional approval from the federal Department of Health and Human Service to have a state-based exchange in December, but actually setting up the new marketplace requires enabling legislation.

It initially looked like the House debate would last for eight hours or more and stretch into the early morning hours, with nearly 100 amendments offered. But most were eventually withdrawn, and only a fraction of those remaining passed. One that did pass said no health plans sold on the exchange could provide coverage for abortion. It was introduced by Rep. Patti Fritz, a Democrat from Faribault, and did include exceptions if the procedure was needed to prevent the death of the mother or in cases of rape or incest. The amendment specifies that the rape must be reported to police within 48 hours for the exception to apply.

The chief author of the exchange bill in the House, Joe Atkins, a Democrat from Inver Grove Heights, did not support the amendment. Atkins suggested the change could discriminate against women who can’t afford to pay for abortion services themselves.

“The outcome of this would be that we would treat — for purposes of a medical procedure –poor women differently from rich women. And regardless of how you feel about abortion, I don’t think anybody in the [House] feels that poor women ought to be treated different from rich folks when it comes to any sort of medical care,” Atkins said.

If the abortion restrictions make it into the final version of the legislation, they might draw a veto from Dayton. An administration spokeswoman said that, “The governor has a long record of supporting a woman’s right to choose. We look forward to seeing the final version of the exchange bill.”

The federal health care law permits states to prohibit plans on the exchange from providing abortion coverage and at least 17 states have enacted legislation to restrict abortion coverage.

Other successful amendments beefed up data privacy. One said the exchange can’t disclose a person’s use of tobacco or gun ownership outside the exchange. But some Republicans, including Kelby Woodard from Belle Plaine, said those safeguards are too weak to protect Minnesotans’ privacy.

“Between us sharing information with the federal government and the federal agencies who we know can’t handle privacy, who we know have a difficult time with how big this will be,” Woodard said. “You ought to be scared.”

Another Republican, Jim Newberger, of Becker, called the legislation “socialist.”

“I have been to the former Soviet Union eight times. I’ve been to Russia, I’ve been to Romania, and I can tell you right now this is a socialist-style medical bureaucracy, and it will not work,” he said.

Despite such dire warnings, the House approved the bill largely on a party line vote with one Republican voting in favor (Jim Abeler, of Anoka) and a Democrat (Laurie Halverson, of Eagan) voting against it.

Right now, the House and Senate bills differ in a couple of major areas, including how the marketplace will be funded. The exchange’s operation is expected to cost the state somewhere in the neighborhood of $60 million starting in 2016. The House bill would fund it with a user tax by withholding a fraction of premiums up to 3.5 percent for plans sold on the exchange. The Senate bill would use an existing tobacco tax to fund the program.

Another difference is in the power of the exchange’s governing board to select which health plans could be offered on the exchange. The Senate version calls for the board to be a gatekeeper for each product, whereas the House version would allow approved insurance carriers more leeway to sell at least two products on the exchange. Chief House author Joe Atkins sought that change late last week to ensure there would be plans offered for sale. But during the floor debate, Tina Liebling, a Democrat from Rochester, said that change removed one of the biggest consumer protections.

“This board needs to give Minnesotans the opportunity to select in much the same way that large employers are able to select plans that meet their needs. Without that I’m not really sure if it’s worthwhile to have a Minnesota exchange,” she said.

Differences between the House and Senate bills would have to be reconciled by a conference committee. If lawmakers fail to approve exchange legislation by March 31, the state would have to accept one operated at least in part by the federal government.

This story is part of a collaboration that includes Minnesota Public Radio, NPR and Kaiser Health News.