It was a big session for health legislation at the Minnesota Capitol.
Lawmakers expanded the Medicaid insurance program in February and met a federal deadline in March to pass legislation for a health insurance exchange.
As the session drew to a close, legislators passed a bill that spells out rules for how the current health insurance market can continue once the exchange gets rolling. And a bill signed by Gov. Mark Dayton on Thursday outlines the future for MinnesotaCare, a state health insurance program for lower-income families.
All the activity can be tough to track.
“People have now heard that a lot has happened, but they don’t know what it means for them,” said Liz Doyle, associate director of TakeAction Minnesota, a St. Paul-based group that has pushed for a greater government role in health care.
“It’s a big year — that’s in response to the Affordable Care Act,” said Peter Nelson of the Center of the American Experiment, referring to federal law passed in 2010 to overhaul the nation’s health care system. Nelson’s group promotes a market-based approach to health care.
Here are some questions and answers about what happened at the Capitol, and what it means going forward.
Q What is a health insurance exchange?
A
A marketplace in which individuals and small businesses can start shopping in October for coverage that begins Jan. 1, 2014.
Minnesota’s version, called MNsure, will consist of a website where people can compare health insurance options. It also will help people learn whether they qualify for public health insurance programs or for federal subsidies when buying commercial coverage.
Q What if I don’t want to use a website?
A
The exchange will include a call center where people can phone to get help shopping for coverage.
Q Do I have to use the exchange?
A
No. The exchange is an option for people who buy individual insurance policies as well as those covered by small employers. Those two groups together now account for about 12 percent of the state’s population.
A bill created rules for the health insurance market that will continue “outside” the exchange next year, so that remains an option. People covered by large employers won’t even use the exchange, although it will probably become an option for them in future years.
Q Are there others who probably will use it?
A
Starting next year, federal law requires that almost all U.S. citizens and legal residents have health insurance. Otherwise, they will pay a tax penalty. So, some portion of the estimated 9 percent of state residents who currently lack health insurance could use the exchange. Also, people can use it to determine if they are eligible for the Medicaid and MinnesotaCare public health insurance programs.
Q Why is Medicaid getting bigger in Minnesota?
A: The federal health law of 2010 gave states the option to expand Medicaid, which is a health insurance program for low-income individuals and families. Dayton opted for an early expansion of Medicaid in 2011, and legislation passed in February continued the expansion for an additional 35,000 people.
Q Why is MinnesotaCare changing?
A
Starting next year, the federal health law sets new standards for benefits in health insurance plans. Under those rules, certain aspects of the current MinnesotaCare program would not be allowed, such as a $10,000 cap on hospital benefits for people enrolled in the program.
A bill signed Thursday by Dayton includes funding to get rid of this cap on hospital benefits. It also lowers premiums for MinnesotaCare beneficiaries and eliminates a $1,000 deductible on hospital services, said Doyle of TakeAction Minnesota.
Q If I’m not covered by a public program, will my health insurance premium get more expensive?
A
It’s not clear. Health insurance companies faced a Friday deadline for submitting plans to state regulators on the policies they’d like to sell for 2014. The plans haven’t yet been approved, so premiums for next year aren’t known.
One key factor is the underlying cost of health care. In 2013, health care costs for a family of four increased 6.3 percent over the previous year, according to a report released Wednesday by Milliman, a health care actuarial firm.
Q Is there reason to think my premium might increase?
A
The federal health law imposes new taxes, expands access to health insurance policies and includes rules that will standardize and, in some cases, improve the benefits offered through policies. All three factors could push up premiums.
Insurance companies won’t be allowed to exclude people with costly health conditions starting next year. In the small-employer market, insurers won’t be allowed to provide discounts to groups that are relatively healthy, said Eileen Smith, a spokeswoman for the Minnesota Council of Health Plans.
Health plans will be required to cover maternity care, behavioral health, and pediatric dental as well as eyeglasses. So, people with insurance policies that currently lack those benefits could see an increase.
Some consumers will find that “you’re not just paying more, you’re getting more,” said Geoff Bartsh, vice president of public policy and government relations with Medica, a health insurer based in Minnetonka.
Q Whatever the premium, might my out-of-pocket costs decrease?
A Yes, depending on your income level and the sort of insurance you currently have.
Many individuals will be eligible for federal subsidies if they buy coverage through the insurance exchange. Federal tax credits will be available for people with incomes up to 400 percent of the poverty level. The threshold works out to about $94,000 per year for a family of four.
“We don’t know yet what the premiums will look like,” said Doyle of TakeAction Minnesota. “We know that most individuals buying private coverage on the exchange will be eligible for financial assistance to offset the cost of premiums.”
The health exchange also is expected to promote competition among health insurers, so that could push costs down. Small-employer groups (50 or fewer people) that previously paid penalties for being less healthy won’t pay those penalties anymore. Finally, a few small employers might receive tax credits.
Q If I qualify for a tax credit, must I wait to claim it on my taxes during the following year?
A
No. The credit would be applied to premiums upfront.
Q Many people in Minnesota are covered by large employers. What about them?
A
Large groups are likely to see relatively few changes for 2014.
Q If I currently have a high deductible with my health insurance, will it be lower next year?
A
It depends. The health law won’t allow deductibles that require people to pay $15,000 before coverage begins, said Smith of the Minnesota Council of Health Plans. But the law will allow deductibles up to $6,350 for individuals and $12,700 for families.
The rules on deductibles are a factor in determining whether your premium might go up.
Q I’ve heard there could be changes to the Minnesota Comprehensive Health Association program. Why?
A
MCHA offers individual health insurance to Minnesota residents who’ve been turned down for policies in the private market because of pre-existing health problems. The program, which is sometimes called the state’s high-risk pool, covers about 26,000 people.
Starting next year, the federal health law will prohibit insurance companies from excluding people with pre-existing conditions from coverage. So, MCHA enrollees will have the chance to buy policies on the health exchange as well as the private market.
“With new insurance options for our enrollees, the need for MCHA will eventually disappear,” the group says on its website. “Our staff is working closely with the (state) on a plan to transition our enrollees to new coverage.”
The state Department of Commerce is gathering public comments to help develop a transition plan. The final plan is scheduled to be issued Aug. 31. Earlier this month, the agency said it is trying to “determine the need for, and implement a phase-out and eventual appropriate termination of coverage provided by MCHA.”
Q I’m on Medicare. Does any of this apply to me?
A
Not really. The federal health law includes provisions that affect how certain Medicare health plans are paid; it also improved Medicare prescription drug benefits. But the issues dealt with at the Capitol this session will have no impact on most Medicare beneficiaries.
Q This all sounds confusing. Is help available?
A
Health insurance brokers will be able to help people buy coverage on the health exchange, as well as the traditional market. There also will be new groups of helpers known as “navigators,” “in-person assisters” and “certified application counselors.” The state recently issued final rules related to these new advisers.
The health exchange won’t be running before October. In the meantime, information is available at www.mnsure.org/hix/how-work/main-faqs.jsp.
Christopher Snowbeck can be reached at 651-228-5479. Follow him at www.twitter.com/chrissnowbeck.
