Health insurance exchange in Minnesota moves one step closer to reality

Minnesota Health Insurance

Minnesota Health InsuranceLawmakers in Minnesota continue to wrestle with health insurance exchange initiative

With the Affordable Care Act looming, lawmakers in Minnesota continue to wrestle with the issue of a state-run health insurance exchange. Those that support the federal health care law argue that it will lead to a dramatic decrease in the costs of health insurance throughout the state, especially if Minnesota decides to operate its own health insurance exchange. Opponents of the law argue that the federal government is overstepping its boundaries. This week, those supporting a state-run health insurance exchange won a major victory.

House votes in support of exchange

The House of Representatives voted 72-58 in favor of a state-run health insurance exchange, bringing Minnesota one step closer to operating its own exchange system. Supporters of the initiative claim that more than 1.3 million people throughout the state will gain access to affordable insurance coverage if the state is in charge of its own exchange program. It is also expected that the exchange will help lower the number of people in the state that currently have no health insurance of any kind.

Exchange may be a very costly gamble for the state

Lawmakers opposing the initiative claim that an exchange is too expensive to justify its existence. The exchange, in its current form, is expected to cost the state $60 million annually, which will cover a variety of costs including administration and providing surplus capital for the health insurance plans sold through the exchange. While the federal government will be providing subsidies that will help fund the exchange for the first year of its operation, Minnesota will eventually bear the full financial burden of the program, which some lawmakers suggest will severely offset any notion of affordable health insurance in the state. In order to fund the exchange, surcharges on all policies sold through the program may be necessary.

Minnesota will have an exchange by January 2014

Whether the state decides to run the program or not, Minnesota will have a health insurance exchange. Per the Affordable Care Act, all states must have a functioning exchange in place by January 1, 2014. States can choose not to operate these exchanges themselves, relinquishing control to the federal government instead. States that decide not to build an exchange will lose the authority to regulate the exchanges that will take root due to federal action.

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