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Minnesota health insurance exchange / marketplace

A lot at stake for MNsure in the final days of the 2015 legislative session

MNsure appoints a new interim CEO

On May 4, MNsure announced that CEO Scott Leitz was resigning in order to take a job with a nonprofit in healthcare cost trend research.  Leitz is being replaced by interim CEO Allison O’Toole, the exchange’s deputy director for external affairs.

Leitz took over as CEO in December 2013 in the middle of the rocky first round of open enrollment, following the resignation of MNsure’s first CEO.  There is no doubt that the exchange is in better shape now than it was when he arrived, but O’Toole noted that “… we have our work cut out for us.”

Changes coming for MNsure?

Given MNsure’s difficult launch, the state conducted a series of audits and reviews.  And the 2015 legislative session has included debate on various directions for the exchange, including the possibility of switching to

The first audit reviewed how MNsure spent state and federal money. Auditors concluded that the exchange has generally adequate internal controls and found no fraud or abuse. The review was conducted by the state Office of the Legislative Auditor, and the report was published in October 2014.

Another audit, also conducted by the Office of the Legislative Auditor and released in November 2014, found that the MNsure system in some cases incorrectly determined who qualified for public health benefits. The errors occurred during the first open enrollment period, before a series of system fixes were implemented. The audit did not quantify the total financial impact of the errors. The state Human Services commissioner said a consultant working on technical fixes to MNsure concluded that the eligibility functionality was working correctly as of June 2014.

A third audit, a performance evaluation report released in February, said “MNsure’s failures outweighed its achievements.” Among other criticisms, auditors said MNsure staff withheld information from the board of directors and state officials, the enrollment website was seriously flawed and launched without adequate testing, and the first-year enrollment target was unrealistically low. Auditors recommended that the governor be given authority to appoint MNsure’s chief executive officer and that the state legislature consider an advisory-only role for the MNsure board.

A lot at stake in the 2015 legislative session

Minnesota legislators are reconsidering MNsure’s governance structure. One bill (SF187) would increase the size the MNsure board of directors from 7 to 9, and require that at least one seat be held by a representative from an insurance carrier, and another by a producer (agent or broker).

Another bill (SF139) would dissolve the board and restructure MNsure as a state agency, which would give the governor and legislature more control.  These measures have received support in their introductory chambers, but it’s unclear how lawmakers will proceed in the final week of the legislative session, scheduled to end on May 18.

Legislators have also introduced a bill (HR5) that would allow consumers to receive subsidies even if they shopped off-exchange. The bill would require a federal waiver, and it’s unclear what value federal officials would see from approving such a request.

In March, Gov. Mark Dayton – a MNsure supporter – asked the legislature to create a Task Force on Health Care Financing that would study MNsure along with possible future alternatives.  Dayton noted in his letter that he supports making MNsure “directly accountable to the governor and subject to the same legislative oversight as other state agencies” and his budget includes half a million dollars devoted to the task force.

All in all, a lot is at stake in the final days of the 2015 legislative session.  Some lawmakers want to turn the state’s exchange over to the federal government as of 2017, but there’s also concern that if the Supreme Court rules that subsidies aren’t allowed in the federally-run exchange (ruling expected in June in King v. Burwell), handing the reins over to could result in tens of thousands of people losing their subsidies.

2015 enrollment count

Between Nov. 15, 2014, and April 13, 2015, enrollment in qualified health plans (QHPs) through MNsure reached 61,874.  In addition, 120,129 people enrolled in Medicaid (Medical Assistance), and another 37,769 enrolled in MinnesotaCare.

Open enrollment for 2015 has ended, as has the special enrollment period that ran from March 1 and April 30 for people who were unaware – until they filed their taxes – of Obamacare’s penalty for remaining uninsured.  In order to obtain new private coverage for 2015, including outside the exchange, you’ll have to have a qualifying life event that triggers a special enrollment period.  The next general open enrollment period starts on November 1, for coverage starting January 2016.

Enrollment for Medical Assistance (Medicaid) and MinnesotaCare, a health insurance program for uninsured, working residents, is open year round.

The first BHP in the nation

For more than two decades, MinnesotaCare has been a state program subsidizing health insurance for low-income residents.  As of January 1, 2015, it transitioned to a Basic Health Program under the ACA, becoming the first BHP in the nation.  The future of the program is uncertain however, as Republican lawmakers would rather see MinnesotaCare enrollees transitioned to subsidized MNsure QHPs, and there’s general agreement that funding for the program needs to be reassessed.

Without MinnesotaCare, the nearly 38 thousand people who enrolled in the program would have been eligible for heavily subsidized premiums and cost-sharing reductions in the exchange, but they would still be paying more in premiums and out-of-pocket expenses than they do under MinnesotaCare.

2015 rates and participating insurers

PreferredOne, which offered the lowest rates in the nation in 2014 and captured a large portion of 2014 enrollees, withdrew from MNsure for 2015. PreferredOne said remaining on the exchange was “not administratively and financially sustainable.” A Star Tribune business writer attributed PreferredOne’s departure as a market dynamics rather than a problem with MNsure.

Consumers who bought a PreferredOne plan through MNsure for 2014 could renew their policies for 2015 by working directly with the insurer. However, PreferredOne rates went up an average of 63 percent, and consumers didn’t qualify for subsidies if they shopped outside the exchange.

Five insurers are offering individual and family policies on MNsure in 2015: Blue Cross Blue Shield of Minnesota, Blue Plus, Health Partners, Medica, and UCare. MNsure is offering 84 plans statewide, up from 78 for 2014. Blue Plus is new to the exchange for 2015.

Minnesota officials announced 2015 premiums increased 4.5 percent on average for the four insurers that returned to MNsure from 2014. MNsure critics characterized the official announcement as misleading as it failed to take into account low-cost 2014 plans from PreferredOne.

2014 enrollment summary

MNsure was quite successful at enrolling residents in 2014 — despite considerable technical problems. A study commissioned by MNsure and conducted by the University of Minnesota showed that the state’s uninsured rate dropped from 8.9 percent in the fall of 2013 to just 4.9 percent over the course of the 2014 open enrollment period — the lowest rate in state history. The study’s author called the drop “unprecedented in Minnesota,” and the state now has one of the lowest uninsured rates in the nation (a Gallup poll released in February 2015 put the current rate at 7.4 percent – still among the lowest in the country).

According to a MNsure press release, 300,085 people obtained health insurance through the exchange as of Aug. 21: 53,770 people enrolled in private health plans, 65,749 enrolled in MinnesotaCare, and 180,566 enrolled in Medical Assistance (Medicaid).

Fixing MNsure

In April 2014, MNsure hired Deloitte Consulting to audit MNsure’s technology and improve the website to make enrolling in coverage and updating life events easier and more streamlined. Deloitte has been involved in successful state-run marketplaces for Connecticut, Kentucky, Rhode Island and Washington.

Software upgrades were installed in August 2014, and system testing continued right up until the start of open enrollment.

To reduce wait times for consumers and insurance professionals, MNsure increased its call center and support staff and launched a dedicated service line for agents and brokers.

More in-person assisters were available in Minnesota for the 2015 open enrollment period. MNsure encourages residents to utilize the exchange’s assister directory to find local navigators and brokers who can help with the enrollment process.

While these changes improved the experience for individuals shopping for private insurance, the exchange continues to be problematic for county workers who help low-income residents. County officials told the MNsure board that the system remains “woefully inadequate” for verifying eligibility and enrolling people in Medical Assistance, MinnesotaCare, and other social services.

Some of the system issues encountered by social services staff may resolved over time with newly awarded grant money. The federal government awarded MNsure $21 million for IT fixes, and that grant triggered an additional $58.5 million from Medicaid. The money will be used to address a list of 18 priority issues. MNsure’s chief operating officer said the workload of social services staff was heavily weighted in creating the priority list.

In April 2015, the MNsure board voted to consider the possibility of partnering with an outside vendor to offer better plan comparison tools for MNsure users.  There have been concerns that enrollees haven’t been able to properly compare plans, and have simply gravitated to the lowest-priced plans available in each area.  Better plan comparison tools might help to solve that problem.

MNsure background

Four insurers offered individual policies through the marketplace for 2014: Blue Cross Blue Shield of Minnesota, HealthPartners, Medica, PreferredOne, and UCare. Kaiser Health News reported that Minnesota offered some of the lowest premiums for silver (mid-level) plans in the U.S. Four of Minnesota’s nine regions made Kaiser’s list of the 10 least expensive places to buy health insurance.

While low premiums are good for consumers, they raise financial concerns for the marketplace. As of 2015, MNsure’s operating costs are funded with a 3.5 percent withhold of premiums. Low premiums translate to less money collected through the withhold.

Low enrollment in private health plans compounds the financial problem. While Minnesota far exceeded its 2014 goal of 135,000 signups for overall enrollment, the mix is much different than expected. Enrollment in Medical Assistance was much higher than expected, while enrollment in private health insurance was much lower.

At a December 2014 board meeting, MNsure released lower enrollment targets and a revised budget. MNsure reduced projected enrollment in private health plans from 100,000 to 67,000 for calendar year 2015. The drop reduces projected revenue from private health plan enrollment by $4.7 million for fiscal year 2015.

Minnesota health insurance exchange links

855-3MNSURE (855-366-7873)

State Exchange Profile: Minnesota
The Henry J. Kaiser Family Foundation overview of Minnesota’s progress toward creating a state health insurance exchange.