Minnesota Senate Passes Exchange Bill

The Minnesota Senate on Thursday night followed the House in passing legislation to create an online health insurance marketplace under the federal health law. A legislative conference committee will meet in coming days to resolve differences between the House and Senate bills. More than one million Minnesotans are projected to find health coverage through the exchange, which is slated to be up and running in October.

The Senate bill passed on a mostly party line vote of 37 to 28 after more than 12 hours of debate.  The longest and most contentious battles centered on the small but powerful seven-person board of directors that will govern the exchange’s operations.  Republican Sen. Paul Gazelka from Nisswa wanted to eliminate a provision disqualifying anyone on the payroll of a health care organization or insurer.  He said it would be difficult to find experts who aren’t currently working in health care.

“In this particular industry, like a lot of industries, your expertise, if you’re out of it for a year, yeah, you still have a lot of wisdom and expertise, but you are missing whatever is currently changing both technology and otherwise,” said Gazelka.

Mound Republican David Osmek, who’s employed by the nation’s largest health insurer, UnitedHealth Group, agreed.

“UnitedHealth Group, they’re into the millions of people, they are the largest in this nation,” said Osmek. “And that we would not use that level of expertise, that level of knowledge leverage our health system to be the best that it is, is an abomination.”

The Senate bill’s chief author, Tony Lourey, a Democrat from Kerrick, defended the restrictions.

“You don’t have to get a check from industry to be an expert on know how the industry works,” Lourey said. “We are not trying to exclude the experience or the perspective. We’re trying to exclude the direct financial conflict of interest.”

Like most amendments the GOP offered, the proposal failed to win a majority in the Demcratic majority Senate.

The board’s power to exclude plans from selling on the exchange also was an issue. This topic has been a speed bump for legislation that’s otherwise moved swiftly through previous committees. Last week, the chief author of the bill secured an amendment allowing companies to sell at least two products on the exchange.

Senate Republicans, including Michelle Benson from Ham Lake, asked to go further: to allow any plan that meets state requirements to be available on the exchange.  Otherwise, she said, the board is limiting consumer choice.

“If the board decides that there are only two plans of value at each level in this state, the consumers get no more say in the exchange; end of discussion,” Benson said.

Senate Minority Leader David Hann from Eden Prairie said allowing the board to exclude plans is giving too much power to the government.

“This is what we’re doing here, people,” Hann said. “We’re saying we’re going to limit your choices for your own good, because we know better than you how to spend your money. That’s what Sen. Lourey and this bill and the Democrats and the Democrats in Washington– that’s what they’re saying.”

Chief author Tony Lourey said the board’s power to choose plans would make sure that the coverage offered on the exchange serves the public interest.

“The question before us is whether that value in the competition is driven better by having more plans or by having better plans on the exchange. This is about getting plans that are in the interest of consumers,” Lourey said.

The amendment to strip the board’s power to deny certified plans ultimately failed. 

Several GOP amendments beefing up privacy protections passed. One provides that state law will prevail when Minnesota law provides greater privacy protection than federal law. Another successful amendment  requires the exchange to have a list and descriptions of its data-sharing agreements on its website. 

And the Senate agreed to require all state legislators to buy their health coverage on the exchange.

During debate, Republicans frequently recalled Gov. Mark Dayton’s recent comment that the exchange is a gamble. Dayton, a supporter of a single payer system, clarified Thursday that he didn’t want to get the public’s hopes up that the exchange would work smoothly from day one.

“There are going to be some glitches initially, and it will take some time to iron that out,” Dayton said.

A conference committee will have to reconcile several material differences between the House and Senate bills, abortion coverage among them. The House version forbids health plans to cover abortions, except to save the life of the woman or if the pregnancy results from rape or incest.  The chambers also differ on how to fund the exchange’s operations: The House bill would impose a user tax of up to 3.5 percent of the premiums on plans sold on the exchange; the Senate would use an existing tobacco tax.  

If lawmakers fail to pass exchange legislation by March 31, the federal government will play a much stronger role in how an exchange will run in Minnesota.

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