Research & Commentary: Minnesota Health Insurance Exchange

Published December 20, 2011

Despite criticism from state legislators, Gov. Mark Dayton and the Minnesota Department of Commerce have pushed forward with the establishment of a state-crafted health insurance exchange, opening exchange simulations to the public.

According to exchange proponents, these simulations are a way for Minnesota residents to test the flexibility and convenience of an online health insurance marketplace.

Opponents argue the exchanges will increase health care costs and cede authority to the federal government. President Barack Obama’s Patient Protection and Affordable Care Act (PPACA) puts the federal government in charge of approval and oversight of the exchanges and grants it the ability to commandeer any state exchange that does not fully meet federal requirements.

Many states have chosen to forgo implementation of health insurance exchanges altogether. John R. Graham of the Pacific Research Institute says elected officials such as Florida Gov. Rick Scott and Louisiana Gov. Bobby Jindal are correct in their opposition: “I believe that they learned—correctly—that anti-Obamacare state politicians should not be collaborating in Obamacare in any way. There is no way for a state to put ‘market-friendly’ elements in a state-based exchange.”

The following documents offer additional information about health insurance exchanges.

State Insurance Exchanges: The Case Against Implementation
Health Care News
Managing Editor and Heartland Institute Research Fellow Benjamin Domenech provides several reasons states should avoid implementing a health insurance exchange. He writes, “Any exchange created to pass muster with HHS Secretary Kathleen Sebelius and the current rules within Obama’s law will be fundamentally flawed.”

Should Virginia Create a Health Insurance Exchange?
Michael Cannon of the Cato Institute explains why the state of Virginia and other states should not craft an insurance exchange. Cannon notes, “Creating its own exchange will not allow Virginia to control its own health insurance markets. In the end, there is no such thing as a state exchange.”

Policy Tip Sheet—State Health Insurance Exchanges
Heartland Institute Health Care Legislative Specialist Kendall Antekeier outlines the arguments against state health insurance exchange implementation and provides facts about previously attempted exchanges. Antekeier writes, “If a state moves forward with implementing an exchange, it could invest valuable time and taxpayer dollars in developing a system only to discover it does not comply with final federal regulations.”

Obamacare Exchange Scheme Could Destroy Insurance Marketplace
This Health Care News article explains how health insurance exchanges could impact the insurance market: “In practice, they [health insurance exchanges] are delivery mechanisms for bureaucracy and could spur a public takeover of the health care system.”

Consumer Power Report: Don’t Go Exchanging
Health Care News Managing Editor and Heartland Institute Research Fellow Benjamin Domenech explains the “threat of an instituted ‘federal’ exchange—where a state presumably would have no input during the process—is a more hollow threat than ever before.”

Research & Commentary: Lessons from Massachusetts and Utah Insurance Exchanges
This Research & Commentary outlines two state experiences with health insurance exchanges, finding they have not produced the desired results but instead increased state health care costs. Heartland Institute Senior Fellow Peter Ferrara is quoted explaining how the Massachusetts exchange increased costs by 42 percent in less than three years.

Research & Commentary: Exchange Regulation and State Implementation
Health Care News Managing Editor and Heartland Institute Research Fellow Benjamin Domenech outlines the exchange regulations distributed by the U.S. Department of Health and Human Services and discusses the risks for states in implementing exchanges.

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News at, The Heartland Institute’s website at, and PolicyBot, Heartland’s free online research database at

If you have any questions about this issue or the Heartland website, contact Heartland Institute Health Care Legislative Specialist Kendall Antekeier at [email protected] or 312/377-4000.