Last year, MNsure ads featured a comical Paul Bunyan stumbling his way into injuries to show the importance of health insurance.
This year, it’s bye-bye Bunyan as the health exchange has launched a much more sober ad campaign — a shift that fits the sense of urgency around boosting commercial enrollment at MNsure.
If sign-ups don’t materialize in sufficient numbers, MNsure will have to find some other way to cover its costs.
Last week, the health exchange acknowledged it will fall far short of its 2015 enrollment target and put forward a new plan for a balanced budget that doesn’t explicitly call for extra money from the Legislature to make up the difference, although some question whether state taxpayers still might wind up paying more. Either way, the bottom line is that MNsure must get enrollees through the door — and fast.
“The pressure is definitely on MNsure,” said Larry Jacobs, a University of Minnesota political science professor who studies health care policy. “They’ve kind of escaped the fire of utter collapse last year. But they’re still in a precarious position.”
Minnesota launched MNsure to implement the federal Affordable Care Act, with a hope of making it easier for individuals and small businesses to buy coverage.
Supporters argued that neither group was well-served by the old health insurance market, so the health law created new marketplaces aimed at making comparison shopping easier and connecting buyers with federal subsidies. The law also gave states the chance to significantly expand Medicaid, the government insurance program for low-income residents.
Taken together, the changes were meant to drive down the number of Americans who lacked health insurance. In Minnesota, MNsure was “created to fill some important gaps in the availability and affordability and accessibility of health insurance,” said Julie Sonier, a health policy researcher at the University of Minnesota.
“It’s not a large percentage of the state’s population that’s enrolled in [MNsure] right now, but it provides a vehicle to get access to that kind of coverage, and access to financial assistance for coverage,” Sonier said. “That’s why there’s a public interest in making sure that it’s sustainable.”
Taxpayers already have pledged $155 million in federal grants to create the MNsure marketplace. There’s also taxpayer money going to Minnesota’s exchange by way of the state Department of Human Services, which is paying millions each year for help enrolling people in public health insurance programs.
On Wednesday, the exchange put forward a new budget plan that projects 67,000 people will enroll in private health plans through the exchange next year. That’s down from a previous projection of 100,000 people.
MNsure withholds 3.5 percent of premiums sold on the exchange, so the lower enrollment projections also reduce expected commercial revenue. During the fiscal year that starts July 1, 2015, for example, MNsure now expects commercial revenue of about $10.6 million, down from a previous projection of about $15.3 million.
Revenue from commercial premiums accounts for about one-quarter of the $43.9 million MNsure budget for the 12-month period starting July 1, with the remainder coming from the state Department of Human Services and federal grants.
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To balance the budget, MNsure is cutting spending for information technology fixes, the health exchange call center and its communications department.
“We’re finding clearly the system is more stable this year than it was last year,” said Scott Leitz, the MNsure chief executive. “That will likely mean less need for IT expenditures (next year). … It will also likely mean less stress on our call center.”
Joe Campbell, a spokesman for MNsure, said health exchange officials have no plans to seek additional funds from the Legislature.
“We’ve said all along that the budget needs to be balanced, and needs to be structurally balanced,” he said. “And if we don’t have the revenue to support the operation, we’d bring the operation in line to where the revenue is.”
During a budget presentation to the MNsure board of directors Wednesday, however, Human Services Commissioner Lucinda Jesson said it looked like the budget plan would require “millions and millions” of dollars in extra funding from her department.
There’s always been an expectation that the health exchange and the Department of Human Services would share costs for the MNsure information technology system and certain exchange operations, said Chuck Johnson, the department’s deputy commissioner, in an interview.
But the new MNsure budget plan suggests the department’s share of these costs will increase, Johnson said.
“That’s what we are concerned about,” he said. “We’re still in the process of kind of assessing … whether we need additional funding, and where we might go to finance it.”
Political leaders offered different takes on the situation.
“They’re asking for a transfer from the Department of Human Services, and that’s taxpayer money,” said Sen. Michelle Benson, R-Ham Lake.
“It sounds like the budget is going to remain in a surplus — no need for any sort of taxpayer money from the residents of Minnesota,” said Rep. Joe Atkins, DFL-Inver Grove Heights.
At MNsure, the focus is on getting thousands of people enrolled in the coming weeks, Campbell said. The exchange is extending call center hours for next weekend, expecting a surge in activity during the days leading up to Dec. 15. That’s the deadline for people seeking coverage starting Jan. 1.
While there are no specific projections for what share of the 67,000 expected enrollees will buy policies this month, about 54 percent of those who bought private coverage last year through MNsure did so by the end of December. The current open enrollment period lasts until Feb. 15.
“A lot of people need to come through. That’s not unexpected. We know that there are major surges at the end, and that people are driven by deadlines,” Campbell said.
“The 67,000 number has been budgeted, and we are hopeful that we’ll reach it.”
If MNsure is looking for ways to help its budget, outsiders have suggestions.
Health insurers suggest that MNsure should stop spending money on its exchange for small business groups, where very few people currently buy coverage. Atkins, the DFLer from Inver Grove Heights, said he doesn’t like that suggestion because it has been “a nightmare” for small businesses to comparison shop without the exchange.
Health policy experts point out that MinnesotaCare provides coverage to a large group of state residents that otherwise might buy through the exchange. Closing the program could boost the number that would get coverage through MNsure, said Jacobs, the political scientist at the U.
“The key issue that MNsure faces is to build a pool of insured people that is large and broad enough so you get the kind of healthy dynamics of risk pooling and risk spreading,” Jacobs said. “Right now, what’s happening is we’ve got a pool that’s too small, and it’s weighted a bit more toward individuals who tend to have higher health costs.”
But Sen. Tony Lourey, DFL-Kerrick, said he would have serious reservations about closing MinnesotaCare, because the program has worked well for decades. Lourey, who carried legislation in the Senate to create MNsure, said it’s premature to start talking about changing MNsure until enrollment numbers come in.
“They’re burning the candle at both ends, trying to make sure they can meet these projections,” he said. The MNsure website, he added, is working “a far sight better than it was last year.”
Buying through MNsure is the only way Minnesotans can obtain tax credits to discount premiums costs, but insurance agents point out that the exchange isn’t the only place to buy coverage.
“Some clients have reported that with calls to MNsure it can still take a long time to get simple tasks done,” said Heidi Michaels, president-elect of the Minnesota Association of Health Underwriters, in a statement. “If one doesn’t need a government subsidy for health insurance it is possible, and often the best option, to go directly to an agent.”
Christopher Snowbeck • 612-673-4744