Health insurance exchange legislation wins major victory in Minnesota
A state-run health insurance exchange may be set in stone in Minnesota. Early this week, state lawmakers passed a legislation that calls for the creation of a health insurance exchange that is managed by the state. The legislation is currently awaiting Governor Mark Dayton’s signature. Plans for an exchange have been in the works for some time, but political battles have sidelined these plans repeatedly. Now, the state is one step closer to having a health insurance exchange in place, which may bring affordable coverage to thousands of Minnesota residents.
State-run exchange rises concerns regarding cost
Like health insurance exchange systems in other states, the one in Minnesota will be designed as an online marketplace where consumers can find coverage that is suitable to their needs. The policies offered through the exchange are meant to cost less than those provided through private insurance companies, though private companies will be responsible for the majority of the policies sold through the exchange system. Because Minnesota is pushing to operate its own health insurance exchange, the issue of cost has been considered a potentially serious problem.
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Exchange may not be as affordable as first believed
Those that oppose the state-run health insurance exchange argue that it will simply be too expensive for the state to manage. Opponents suggest that the exchange will require a $64 million budget, most of which will cover the salaries of the board members to be assigned to govern the exchange. For the first year of the exchange’s existence, the state will receive financial support from the federal government that will help cover the costs of the system. After that, however, Minnesota will be required to pay for the exchange itself. Funding for the exchange may come in the form of surcharges on health insurance policies, which may make these policies more expensive and thereby negate the affordable aspects of the exchange system.
Exchange board to select policies to be sold through online marketplace in 2015
Now that the exchange legislation has been passed, insurance companies will be able to submit their policies to the state’s health insurance exchange. For the time being, many of these policies will be welcomed into the exchange program. In 2015, the exchange’s board of directors will be responsible for selecting policies that can be sold through the exchange in an effort to ensure that the exchange is better suited to the needs of the Minnesota market.