M I N N E S O T A ers. Defined contribution allows the employer to forecast and predict costs on an annual basis because they can control the defined contribution that they allocate as part of their budget to the employees. It gives the employees greater choice instead of picking only one plan provided by the employer. They can go into the exchange and choose from what are currently 198 different plans. It builds loyalty between employee and carrier because now these products are portable. It doesn’t matter if the employee leaves and goes to work for another employer. As long as that employer is in the exchange, the employee can carry that health plan with them. Before, you didn’t have that. Defined contribution has been a big success with the Utah Health Exchange. MR. CHRISTENSON: If Minnesota has a statebased exchange, not a federal one, can we design our own essential benefits set?
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acute and chronic pain. They also provide that in an outpatient, ambulatory context. Will these providers be included in those benefit packages? MR. CHRISTENSON: The Affordable Care Act requires the financing of health care exchanges to be self-sustaining. Where should the money come from to operate Minnesota’s exchange? MR. MUNSON-REGALA: Exchanges need to be self-sustaining starting in 2015. Before that, Uncle Sam pays for design, development, and operational costs of an exchange. In 2015, we have several options. One is the Medicaid match. Some funding could come from our partner agency, DHS. Another source of funding could come from user fees, either on top of the premium or from the premium itself. In other words, consumers, insurance
MR. MUNSON-REGALA: Yes, until the feds implement one nationwide in 2016. If we choose to add additional benefits and/or
If there isn’t choice, if it isn’t affordable, you’re not going to get participation. Dan Maynard
mandates on top of that core set, the state of Minnesota picks up the cost associated with requiring additional benefits to be sold throughout the entire marketplace. DR. SAWYER: The Affordable Care Act requires 10 categories of essential benefits, including ambulatory patient services, rehabilitation, laboratory services, and preventive and wellness services. Which providers of those services will plans include in their benefit package? For example, chiropractic doctors are in many respects primary care physicians, certainly for musculoskeletal problems, and they do that in an ambulatory service capacity. They also provide preventive and wellness services. Second example: Acupuncturists are increasingly sought after, particularly for patients with
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companies, navigators, and brokers using the exchange may pay some fee to access it. General revenue—highly unlikely—could fund. Other possibilities include naming rights and advertising. It’ll probably be a blend of some of those rather any one mechanism. DR. SAWYER: Manny’s right; it’ll have to be a blend. According to documents from the Insurance Exchange Task Force, as of last week, it had not reached a conclusion about how this will be operationally paid for. MS. MCMULLEN: We believe there should be a market outside the exchange. You have to consider the impact of the cost of that exchange. You don’t want it spread across the whole market. It should be paid for by the users of an exchange.
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MR. MAYNARD: If you’re going to use user fees, I’d make them transparent versus making health plans pay an extra fee to be on the exchange. I’d make it as transparent as possible so that the competitive nature of it can play out without having administrative costs buried within. MR. SCHUYLER: Utah pays for the exchange strictly through a per-member, per-month administrative fee. That fee includes a $6per-month admin fee to pay for operation of the exchange. Brokers that facilitate enrollment for, I believe, about 93 percent of the employers that come through the exchange, get a $37-per-month commission on each transaction. DR. DEHNEL: In our own Minnesota experience, when the provider tax first came out there were prohibitions against being able to disclose that. Minnesota doesn’t necessarily have a great track record of transparency in these mandates. I second the notion that we have a transparent disclosure of wherever fees come from. MR. MUNSON-REGALA: Massachusetts funded its exchange with an initial loan from the legislature that had to be repaid. Massachusetts’ funding source was a percentage of the premium of the policy sold in the exchange. So they kept a cut off the top or the bottom. It started at 5 percent of premium. It’s now around 3 percent, scaled down relative to its predicted revenue and projected expenses. Percentage of premium, in a way, is a fee for insurers. Another way an exchange could fund itself could be in the form of an annual license to participate in the exchange: If an exchange is a farmer’s market, you pay rent on the stall you have in the farmer’s market. There’s disagreement about whether or not the exchange is useful to anybody other than the folks buying through it. I would say it does. If you come to the exchange to shop but you go to Blue Cross to buy directly, the exchange has served some benefit to you because it has given you validation that the price you get from Blue Cross is the best one you can get. The exchange provides validation for your purchasing decision. How much that’s worth to you and where the expense for providing that service comes from, I don’t know. Also, this will be a nonprofit exchange, so generating revenues through grants and donations is another option.
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sponsored by Minnesota Physician Publishing, Inc.
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