MNsure's latest concern: Will taxpayer money be needed to shore up future costs?

ST. PAUL -- MNsure is falling short of enrollment targets, and state legislators are questioning whether the health exchange might need more taxpayer support to fill budget gaps down the road.

ST. PAUL -- MNsure is falling short of enrollment targets, and state legislators are questioning whether the health exchange might need more taxpayer support to fill budget gaps down the road.

Scott Leitz, the interim chief executive at MNsure, said at a legislative oversight committee meeting Thursday at the Capitol that with current enrollment trends, MNsure isn't even on track to hit the low end of its goals.

"We're running right now at about 85 percent" of the lowest scenario, Leitz said.

MNsure officials hope the trend will improve as the health exchange tackles technology problems, ranging from website glitches to an overwhelmed call center. But lawmakers are concerned because the MNsure budget already faced a challenge since premiums for insurance policies in the state came in lower than expected.

Low premiums are good for consumers, but they hit MNsure's operating revenue, which will come from withholding up to 3.5 percent of premiums, starting in 2015.


"It looks like MNsure loses money every year," said Sen. Michelle Benson, R-Ham Lake, during the committee hearing.

Sen. Tony Lourey, DFL-Kerrick, followed up on Benson's comment by asking whether MNsure expects to seek funds from the Legislature to cover operating costs.

In an interview after the meeting, Lourey noted the projected budget shortfall would hit in 2015 and 2016, but not this year.

"There is a little time to work on this," he said, before adding: "They're going to need to do some very serious work and internal reviews, and think very carefully about whether they come back to the Legislature for any solution to any potential budget shortfalls."

Minnesota created the MNsure health insurance exchange to implement the federal Affordable Care Act, which calls on almost all Americans to have coverage starting this year. Operations currently are being funded with more than $150 million in grants from the federal government.

The health exchange rollout has been rocky, particularly during the last six weeks.

Beyond website glitches and call center wait times, MNsure has struggled to communicate information about enrollees to private health plans in a timely manner. Some people who enrolled in plans by Dec. 31 still don't have health plan ID cards, although they should arrive soon.

This week, Legislative Auditor Jim Nobles announced he wanted to investigate the troubles at MNsure, and state officials said a division of Minnetonka-based UnitedHealth Group had been brought in to conduct a review of information technology problems. Many of the problems were delineated in a letter from Gov. Mark Dayton to IBM in December, which highlighted 21 specific issues, including a "black hole" where 1,100 applications for coverage were lost.


In late December, MNsure officials said that some consumers who couldn't close the deal on coverage through the health exchange might want to consider buying policies directly from insurance companies.

The operational challenges were seized on by both Republicans and DFLers during Thursday's meeting.

"We are left with a whole set of questions, just about how we're going to get out of the position that we're in today," said Lourey, who carried legislation last year in the state Senate to create MNsure.

Insurance agents and a new group of advisers called "navigators" have had to put in countless hours of extra work trying to help consumers handle MNsure troubles, Lourey said. In addition, state workers in the Department of Human Services had to manually process thousands of applications in late December to make sure people had coverage starting Jan. 1.

"It's just not sustainable," Lourey said.

The challenges for MNsure are real, Leitz responded, but there are hopeful signs.

Previously, about 20 percent of MNsure users were running into troubles when trying to determine whether they qualified for a public health insurance program or a federal tax credit to discount premium costs, Leitz said. Now, only about 2 percent of users are having those problems, he said.

The problem with the application "black hole" has been largely resolved, Leitz said, and contingency plans involving paper applications should help MNsure handle an expected surge in applications in March.


All along, MNsure has tried to highlight stories from happy consumers. Thursday's meeting, for example, started with testimony from Denise Gagner, 32, of Minneapolis, who said she expects to save more than $2,000 this year thanks to a plan she bought through MNsure.

Another consumer who testified Thursday worked with health insurance navigators and deemed the process "quite easy."

But Republicans challenged commentary from MNsure leaders Thursday about how Minnesota consumers are benefiting from low premiums on the health exchange. The rates might be low compared to premiums in other states for 2014, but they're still much higher than what many were paying last year, said Rep. Tara Mack, R-Apple Valley.

When Beutner said he couldn't answer questions about a change last spring to MNsure's contract with its primary software vendor, Rep. Joe Hoppe, R-Chaska, said: "We apparently have a board that doesn't know anything about anything."

Democratic-Farmer-Labor Party legislators also raised concerns.

Sen. Kathy Sheran, DFL-Mankato, said she can't understand why MNsure hasn't been able to resolve call center wait times that even this week still exceeded an hour some days.

Rep. Diane Loeffler, DFL-Minneapolis, said that if MNsure is facing budget troubles, it might consider ditching its current marketing campaign. Loeffler said she's questioned whether it's well suited to connecting uninsured Minnesotans with coverage.

When MNsure was created, lawmakers assumed consumers collectively might buy anywhere from 2.3 million to 5.2 million months worth of coverage through the website during 2016. The exchange is now on track to sell just under 2 million months worth of commercial coverage during 2016.


In response to Lourey's questions about filling MNsure's future budget gap, Beutner said he didn't want to ask the Legislature for money. And he assured Hoppe, the Republican from Chaska, that he didn't want to pass more costs on to people who purchase coverage through MNsure.

But when asked for examples of how else MNsure might raise funds, Beutner said MNsure was exploring options. Leitz, meanwhile, told committee members that the exchange might have to cut costs down the road.

In an email after the meeting, MNsure spokesman John Reich wrote that having a strong customer focus going forward would be key for the health exchange to attract more enrollees.

"That means a better customer experience for those who have encountered issues, and that's what we're continuously working on," Reich wrote.

Leitz became interim CEO at MNsure in December following the resignation of Executive Director April Todd-Malmlov. Legislators praised Leitz on Thursday for openly sharing information, while criticizing the lack of transparency previously.

Beutner responded by saying that MNsure historically had provided information that was "correct, but not clear."

The Pioneer Press is a media partner with Forum News Service.

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