Insurance exchange changes the state health care gamePublished 11:18am Monday, March 25, 2013
ST. PAUL — John Borowicz has high hopes that a new state-run health insurance exchange will make buying coverage simpler and more affordable for his Plymouth-based business.
When he and his wife, Jackie Drury, bought Ovation Framing a year and a half ago, Borowicz set out on his own to find a good health plan for his six employees. It brought nothing but frustration.
“It was near impossible,” said Borowicz, who previously worked in corporate IT. “It’s a Byzantine and stupid system that doesn’t make any sense.”
Signed into law Wednesday by Gov. Mark Dayton, the exchange will represent a fundamental change in the health insurance marketplace for small businesses and for people who don’t get health coverage at work.
A key aim is to level the playing field for the little guy.
“If you’re overweight and 55 and have had a health condition, the plans basically can say we’re not going to insure you or they’ll cite you a really high premium,” said Lynn Blewett of the State Health Access Data Assistance Center. “With the new health insurance exchange, every individual will be part of a larger pool. It’s like having a large employer negotiating on your behalf.”
Early estimates are that 1.3 million people eventually will enroll in health plans using Minnesota’s exchange, which state officials call MNsure. That includes 300,000 uninsured Minnesotans and those who qualify for public programs such as Medical Assistance or MinnesotaCare, plus individuals and small businesses that may have coverage but want better options.
The MNsure exchange will launch on Oct. 1, allowing people using a website or phone call to make apples-to-apples comparisons among plans. Traditional insurance brokers as well as certified “navigators” working at county offices and community service centers also will be able to guide citizens through the process.
Minnesotans who earn too much to qualify for public health coverage may be eligible for federal tax credits or cost-sharing subsidies to reduce out-of-pocket costs. The sign-up process will automatically calculate that amount or determine eligibility for public health programs.
“That kind of one-stop shop has never been available to citizens before,” said Leslie Wolfe, a division president at Maximus, the lead contractor for building the exchange. “People can shop in a user-friendly way that helps explain things in ways that haven’t traditionally been explained.”
Even though lawmakers hammered out a blueprint for how the Minnesota-made exchange will be set up and financed, there are plenty of unknowns.
For one, consumers and small business owners won’t know for months what kind of plans insurance companies will offer and, more important, how much coverage will cost.
“There’s some concern about increases in premiums,” Blewett acknowledged. “It’s hard to know without seeing who shows up and how the insurance companies set their prices.”
Starting in 2014, when key tenets of the federal law championed by President Obama roll out, insurance companies will no longer be able to deny coverage to people who are already sick.
Insurers also will have to cover a basic set of health care issues, including maternity care and mental health coverage, and they won’t have the same freedom to set sky-high deductibles to offset premiums.
In Minnesota, where the exchange is estimated to cost $60 million a year to operate, insurers will kick in a 3.5 percent premium tax for plans sold on the exchange to help fund it. It’s a cost they may pass on to consumers even as they go head-to-head to compete for business.
The state’s private insurance companies stand to gain tens of thousands of new customers, however, and the major players have indicated that they are designing plans to sell on the exchange.
But with a May 17 deadline to get their exchange offerings to the state for review, some say they don’t have the needed lead time to get well-thought-out plans off the ground. Developing a new insurance product can take a year, said officials of Blue Cross and Blue Shield of Minnesota.
Insurance broker Mary Setter has spent the past year keeping her small-business clients abreast of activity at the Legislature and explaining how the Affordable Care Act and new insurance exchanges will affect them.
“Many of our clients won’t know if they’ll go on the exchange until they know what it looks like,” said Setter, of RJF Agencies in Brooklyn Park.
—Minneapolis Star Tribune