St. Paul, Minnesota — Tonight, the Minnesota House of Representatives passed HF 5, legislation establishing a health insurance exchange, on a vote of 72 to 58. The exchange will be an online marketplace where Minnesotans can compare and purchase health insurance coverage. Rep. Mary Sawatzky (DFL – Willmar) voted in favor of the bill.
“The health insurance exchange is projected to serve more than 1.2 million Minnesotans through an online marketplace where individuals, families and small businesses will be able to get quality, affordable health coverage that fits their budget,” said Rep. Sawatzky. “Done correctly, this is a huge, positive step forward for health care reform in Minnesota.
Enrollment in the Minnesota Health Insurance Exchange begins October 1, 2013, with plan coverage starting January 1, 2014. If Minnesota does not pass legislation establishing an exchange, the federal government will step in and establish it for the state.
“Regardless of your feelings on the Affordable Care Act, when it comes to the health insurance exchange, I think we can all agree that we would rather have it be a Minnesota-made exchange, rather than a one-size-fits-all federal model,” said Rep. Sawatzky. “Minnesota is already known as a health care leader and by taking charge of our own exchange, we can maintain that reputation.”
Minnesota families are projected to save over $1 billion by using the exchange to purchase insurance — with the average family saving $500 and a lower-income family saving approximately $1,800. The exchange is expected to help roughly 300,000 uninsured Minnesotans gain coverage by 2016.
Nearly 200,000 small businesses employees are also expected to access coverage through the exchange. Small businesses currently pay on average 18 percent more than large businesses, an average of $11,000 per year for a family coverage. Small employers are projected to save up to 7.5 percent off of premium costs in the exchange and those eligible for tax credits will save even more. Small business owners would be able to choose the plan for their workers, or let their employees choose the plan that’s right for them.
“Through increased competition and tax credits, Minnesota families and small businesses can benefit tremendously from the exchange,” said Rep. Sawatzky. “Helping our families and small businesses save money on health care costs is good for our economy and good for Minnesota.”
The bill funds operation of the exchange by charging health insurance companies up to a 3.5 percent surcharge on premiums of the health plans purchased through the exchange. Exchange staff expects to charge less than 3.5 percent especially in the second and third years of operation.
The Senate is expected to pass their version of the Health Insurance Exchange bill later this week. The two bills would then go to a conference committee.