Dahms sees holes in health insurance exchange

MARSHALL – Minnesota’s own landmark health exchange is in the works in St. Paul, having cleared one hurdle Monday night in the House. On Thursday, it reached the Senate floor and seemed headed for approval, according to District 16 Sen. Gary Dahms.

But many Republicans, including Dahms, have issues with how the exchange has been drafted, and Dahms called it unfortunate that Democrats in the Legislature didn’t accept amendments to improve on the bill.

“It’s very unfortunate that the author of the bill was not willing to accept amendments to make the bill better,” said Dahms, R-Redwood Falls. “I see several issues with it.”

Dahms said one drawback he sees to how the exchange will be set up is that the governing board, which consists of seven people appointed by DFL Gov. Mark Dayton, doesn’t include any representatives from the medical or insurance industries.

“You can draw a lot of expertise from people from the medical and insurance communities,” he said. “If you had one from each, you would still have five (appointed) members, and it only takes four to transact business. It’s not like these two could’ve swayed a decision; they could’ve given some expertise. Typically, if you have an issue you go to the people that understand the issue, and I think they should have that involvement on the board.

The board’s expected operating costs of $60 million a year would be covered with a fee on premiums of up to 3.5 percent, the Associated Press reported. That’s a marked difference with the Senate’s bill, which instead taps money from a state tobacco tax.

Dahms said he doesn’t see the cost of health insurance being reduced as much as some people believe since the price of a policy has already been approved and agreed on with the State Department of Commerce.

“What I think you’re going to see happen is they’re going to try to drive up the percent of the premiums paid out in claims,” he said.

Dahms also said he’s hearing the board will try to get insurance companies to pay out 90 percent of premiums in claims, as opposed to 80 (to groups of 50 or less) and 85 percent (for groups with more than 50) and “it’s just not going to work,” he said. “Our health insurance companies are running off profits of 2 to 3 percent, so the margins just aren’t there.”

The House approved the bill Monday night, 72-58, on a nearly party-line vote, after more than five hours of debate.

Preliminary estimates are for the state-run exchange to offer coverage to 1.3 million people. Of those, about 300,000 currently lack health insurance, the AP said. Another 600,000 are people currently covered by public programs, and several more hundred thousand are small employers who ideally will be able to get a better deal than their current insurance offers.

A federal deadline requires the bill to be passed by the end of the month, with enrollment to start Oct. 1.

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