The Minnesota way: State-run exchange meets unique needs of residents

Minnesota long has been a national leader in health care. With the passage of the federal Affordable Care Act, we have an opportunity to continue this legacy with the creation of a Minnesota-based health exchange.

On Jan. 1, 2014, individuals and small businesses across the country will be able to compare, choose and buy health insurance through new health exchanges that are being created now, state by state. Individuals also will be able to determine their eligibility for premium tax credits, cost-sharing assistance and public programs through these exchanges.

Each state can create its own exchange, partner with the federal government to create an exchange, or fail to establish an exchange and default to a completely federally run exchange.

By 2016, under the Minnesota-based exchange proposed currently in Senate File 1, it is projected that about 1.3 million Minnesotans — one in four — will find their coverage through this mechanism. This includes about 300,000 currently uninsured Minnesotans and 160,000 small-business employees.

An important feature of creating a state-based exchange is the ability to determine which funding mechanism is right for Minnesota. The federal exchange will operate under a 3.5 percent premium withholding that will be levied on all insurance products sold through the federal exchange. As currently planned, this withholding is not expected to decrease. However, if Minnesota chooses to create its own exchange, the amount projected for operations starts at about the same 3.5 percent for the first year before dropping to 2 percent or lower by the third year. This is a significant reduction in costs over the federal option.

Unlike a federal exchange, a state-based exchange would allow Minnesota to provide consumers with important information on health-care-provider networks and quality ratings. This information is particularly important in more remote or rural areas where a doctor may be as far as an hour away in one network but right next door in another.

A state-based exchange also will ensure we continue our tradition of aiming to provide health care to all Minnesotans in a more person-centered, cost-effective and efficient manner. As found in legislation before the Minnesota Legislature, Minnesota’s exchange would be run by a seven-member board consisting of three members representing consumer groups served by the exchange, three health-care experts and the commissioner of human services. No member would be allowed to serve on the board if they have a direct financial conflict of interest. This would help guarantee decisions made by the board will be in the best interest of Minnesotans.

The Minnesota exchange also is set up as a smart-purchaser system. This model provides the exchange with the leverage necessary to drive better value in the products made available to Minnesotans through its marketplace.

As Minnesota moves along in implementing its own state-based exchange, it is important to remember the exchange is only one step toward real reform and reaching the “triple aim” in health care: improving patient experiences, achieving better population health and reducing overall costs to the system.

By building our own state-based exchange, we are creating a foundation for future reforms based on the unique needs of Minnesota’s residents and health-care system.

Simply stated, Minnesota can and should do much better than a one-size-fits-all federal exchange.

Sen. Tony Lourey of Kerrick is a DFLer who represents District 11 in the Minnesota Senate. He wrote this exclusively for the News Tribune.

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