Minnesota republicans propose personal accounts alternative to health insurance exchange

Republican lawmakers in the Minnesota statehouse are proposing a new alternative to health insurance exchanges – personal savings accounts. They call the plan a free-market alternative to proposals from Democratic Governor Mark Dayton and federal health care reform requirements.

Under the terms of a newly proposed bill, individuals would have access to personal health premium accounts where they could amass funds from a variety of sources to buy health care coverage. The plan comes as the state is coming up on a deadline for certification from the federal government for its health care exchange plan.

Federal health care reform requires that states either create their own health insurance exchange for state residents or have a generic exchange administered for them at the federal level. Republican legislators are calling this a financial instrument for consumers to use so that they can afford health insurance.

The new proposal makes no mention of a health insurance exchange, and Republicans have said openly that it is not an exchange. Minnesota has been working toward creating its own state run health insurance exchange for several months and is attempting to get federal funding for the project.

Supporters of health insurance accounts say that it would solve the same problem of insurance affordability that health insurance exchanges are supposed to solve for consumers. They are also pushing the Governor to ask for an exemption from the exchange model in order to offer personal accounts instead.

Other states are looking at more “free-market” alternatives to health insurance exchanges. Governor Scott Walker of Wisconsin who currently faces a recall challenge created an Office of Free Market Health Care to find alternatives to federal health care reform requirements. In Pennsylvania, Governor Tom Corbett is proposing a multi-exchange concept that would allow privately run exchanges to compete for business with the state exchange.

The Minnesota bill is sponsored by two key Republican lawmakers who are chairmen of legislative health care committees — Rep. Steve Gottwalt, R-St. Cloud, and Sen. David Hann, R-Eden Prairie. The Minnesota Chamber of Commerce has also announced its support for the plan.

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