Reality #8 – Public Locked Out of Exchange Decisions


The public will have no say over federal control of health insurance and medical care if the Minnesota Healthcare Exchange legislation (SF1/HF5)  passes in its present form. The Exchange Board will be exempt from all the  requirements that protect the public from runaway rulemaking. 

What is rulemaking? When the legislature creates a new government agency, the legislation often allows these state officials to write rules (regulations) to implement laws that come under the entity’s jurisdiction. 

Here is an easily understood example: If a state law says everyone has to have a red mailbox, the legislature may specify in the law that a government agency can write rules to enforce the law. Such rules could define the color “red.” They could say how often mailboxes must be painted, how many inspectors will monitor and enforce the red mailbox requirement, the process to appeal the inspector’s decision, and if allowed in law, the imposition of financial penalties.

Once finalized, agency rules have the full force and effect of law although not one legislator has read them or voted on them. In short, rulemaking is the transfer of authority from elected legislators to unelected government officials.

Legislatures know the danger. State law typically prohibits the authority of an agency in rulemaking, limiting the agency’s regulatory power over the people. In Minnesota, the Administrative Procedures Act requires agencies to solicit public comments for at least 30 days following the publication of a proposed rule. It also requires a public hearing before an administrative law judge if 25 people write letters to the agency opposing the rules.

Agencies, not surprisingly, want as little interference from the public as possible. As the Senate Insurance Exchange bill currently reads, the MN Insurance Exchange Board would be exempt from the administrative procedure act’s protections that allow the public to slow or stop the proposed rules.  The Board would not have to follow the state law other agencies must follow.

The Board can do “expedited rulemaking” which allows them to issue the proposed rules, solicit comments, but then ignore them. Just 30 days later they may adopt the rule regardless of the comments. Furthermore, no public hearing is required no matter how many letters are received opposing the rule.

The Board is required by Obamacare if a state sets up a state exchange. It must enforce state compliance with the federal health care reform law, including the imposition of the government exchange, selection of a limited list of insurance options, overseeing the practice of medicine and sharing vast volumes of private data with the federal government and “other entities.” 

This all-powerful Board of seven strangers will impact the lives of millions.  The very people being affected by their decisions will be shut out of the rulemaking process. The public will not have the opportunity to be heard or the right to effectively oppose the Board’s rules.