Archived Story

MNsure lowers enrollment projections: Plans aim to prevent 2015 budget shortfall

Published 10:03am Thursday, February 27, 2014

By Christopher Snowbeck

St. Paul Pioneer Press

ST. PAUL — MNsure is significantly cutting enrollment projections and planning how it would make cuts if needed next year to prevent a budget deficit.

New projections for 2015 show enrollments in commercial insurance plans are about 25 percent below figures presented in January, according to information released Wednesday at a board meeting in St. Paul.

Even at that earlier enrollment pace, Minnesota’s health insurance exchange was falling short of its original targets because of website problems and an overwhelmed call center.

Those targets “were never going to be true, but now certainly aren’t going to be true,” said board member Tom Forsythe, who presented the enrollment figures as part of a budget presentation.

The Legislature created MNsure last year to implement the federal Affordable Care Act, which requires almost all Americans to have health insurance or pay a tax penalty. People can use the MNsure website to buy commercial insurance policies.

More than 31,000 people had enrolled in commercial health plans through MNsure as of Monday, and exchange officials released numbers Wednesday to suggest insurance shoppers aren’t as frustrated as they used to be.

Call center wait times this week have averaged less than 3 minutes, officials said. That’s down significantly from waits of more than an hour in December. Some figures show improvement in the website’s performance, too.

MNsure is preparing for an expected surge of customers next month as people rush to comply with the health law’s requirement for most individuals to have coverage or pay a tax penalty. To satisfy the mandate, people have until March 31 to sign up, said Scott Leitz, the interim chief executive officer at MNsure.

“We do anticipate the spike of enrollment will be higher in March,” Leitz said in an interview. “The system is functioning much better than it was in December.”

Starting next year, MNsure must be financially self-sufficient and will fund operations by withholding up to 3.5 percent of premiums sold on the marketplace. Operations currently are funded by federal grants.

The new projections show Minnesotans purchasing about 500,000 months of coverage through the online marketplace this year, and more than 1.1 million months of coverage next year.

In early January, MNsure officials said consumers were on pace to purchase 915,350 months of coverage through the health exchange this year, and 1.6 million months of coverage in 2015.

“For the purpose of planning out a budget, it was important to err on the side of being conservative in terms of what we think enrollment is going to be,” Leitz said. “The upside is if the number happens to be higher than that, our budget situation looks better.”

Republicans pounced on the new figures, and charged that DFL Gov. Mark Dayton “dramatically overstated” enrollment projections last year.

“As a result of the administration’s wildly inaccurate financial assumptions, MNsure will likely run a significant deficit next year and into the foreseeable future,” said Rep. Greg Davids, R-Preston, in a statement.

Forsythe didn’t have precise estimates yet for what the new enrollment numbers mean for the budget. But for revenue and expenses to match in 2015, Forsythe suggested the agency will need to find $2 million to $4 million in savings.

In the future, MNsure might stop collecting premiums from enrollees and let insurance companies do the job, Forsythe said. That could save more than $2 million. In a worst case scenario, MNsure also could save $2 million by scaling back marketing activities during 2015.

Such cuts could be avoided, though, if MNsure gets approval from the federal government to use some grant money during 2015, Forsythe added. Currently, grant expenditures are allowed only through the end of this year.

“I personally think this group needs to come back with a balanced budget,” said Forsythe, a General Mills executive who is part of a board subcommittee focused on the MNsure budget.

State legislators have been anxiously watching MNsure this year to see if low enrollment would force the health exchange to seek funds at the Capitol. One budget impact from low enrollment, Forsythe said, is that operating costs diminish, too.

Distributed by MCT Information Services


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