Brian Beutner, now chairman of the board, said that initial experience was surreal and completely spontaneous — it was the first time the board members had all met. “Something will go wrong,” Beutner recalls saying in response to the question. “Many things will go wrong,” he said. “Let’s fix it, and let’s move on.”
Beutner’s words turned out to be prescient. Now, six months after MNsure began enrolling Minnesotans — after months of technological failures, tens of thousands of application issues and manual workarounds, a sudden leadership change, chronic overload at the exchange’s help line and a dramatic short-term recovery, the first part of the sprint toward federal health reform is over.
The exchange closed out the Affordable Care Act’s first open enrollment period on Monday, March 31, at midnight with nearly 170,000 enrollments. That breaks down to roughly 47,000 private plan enrollees, 34,000 Minnesota Care enrollees and about 88,000 Medical Assistance (Medicaid) enrollees. It also doesn’t account for up to 36,000 people who attempted to make it through the system — but couldn’t — that exchange staff will help to enroll over the next month.
And MNsure has declared success — though, in keeping with its thoroughly politicized history, that’s up for debate. With a breather until exchange sign-up begins for 2015 in November, officials must hire a new lead contractor to fill out the system’s IT infrastructure, navigate federal regulations to continue MinnesotaCare and prove to state lawmakers they can craft a sustainable funding model for MNsure.
“It was a long, winding path,” Beutner said of the last six months. “I’m excited about the future.”
Shortly after MNsure launched in October, officials projected that the exchange would enroll about 135,000 Minnesotans over the next six months.
Those estimates included roughly 70,000 consumers who would choose a private plan and 56,000 who would join public health care programs. The number of private plan enrollees for all of 2014 eventually got revised down to about 50,500.
MNsure blew its overall target out of the water, surpassing 135,000 enrollments by nearly 35,000 people in the end.
It’s been a key message since the exchange surpassed that milestone in late March.
“I’m pleased by the numbers we’ve seen,” Beutner said in an interview. “I think it exceeded our realistic expectations from the start of open enrollment and it gives a good base to build.”
But the underlying enrollment mix isn’t quite what analysts predicted. More than seven times the expected number of Medical Assistance enrollees flooded the exchange, while Minnesota-Care enrollment was 10,000 people short and private plan enrollment — which funds MNsure’s operations beginning next year — was 23,000 (about 33 percent) short of the original goal.
Roger Feldman, a health care economics scholar at the University of Minnesota, called it a “kind of a glass half-filled and glass half-empty picture.”
He called the unexpected surge in Medical Assistance enrollments a positive trend that helped MNsure hit its overall goal, but added that the private enrollment numbers represented a disappointment.
That’s a point that Republicans have been stressing since exchange leaders declared that MNsure had finally turned a corner.
“How my friends on the other side of the aisle can possibly even suggest that this has been a success is kind of like me saying my Weight Watchers diet has been tremendously successful,” Rep. Greg Davids, a portly Republican from Preston, said at a Wednesday press conference. “It’s just nonsense. It is pure and utter nonsense.”
One of the key measures that observers have been watching is the age of exchange enrollees. The conventional wisdom in health care circles is that around 40 percent of participants needed to be drawn from the ranks of the “young invincibles” — healthy 20- and 30-somethings who would help to offset the costs tied to less healthy enrollees. The Obama administration estimated last September that 38.5 percent of enrollees in the federal marketplaces would be between 18 and 34.
MNsure’s preliminary results for the enrollment period show that the exchange has fallen short of that goal; just under 24 percent of private insurance buyers are in that age range. And that points to a cloudy future for consumers and the health insurance companies, Feldman said, because it means rates will likely jump next year in order to cover the costs associated with those who did enroll.
“That is not sustainable.” Feldman said. “That’s not half-empty or half-full — that’s just bad news.”
Minnesota’s health plans counsel caution in extrapolating too much from the early numbers. Eileen Smith, spokeswoman for the trade group Minnesota Council of Health Plans, said there isn’t yet any solid health care cost data to validate observers’ fears about the demographics.
The health carriers also don’t have much information on the demographics and health status of consumers who chose to forgo MNsure and secure coverage directly from insurance companies. The individual market risk pools — inside and outside of the exchange — include consumers who chose coverage through both routes. Smith said the external information wouldn’t be available till later this month.
Still, health plan actuaries are already working on the rates for 2015 — without any of that data. The product filing deadline with the Department of Commerce is June 27, when the agency will begin reviewing the proposed insurance plans and the associated rates, Smith said.
Department of Commerce spokeswoman Anne O’Connor said in an email that the insurance regulation agency will soon issue guidance on the timeline for product review in advance of the next open enrollment.
“We know that it isn’t imploding,” said Jon Gruber, an MIT economist who created models for MNsure’s enrollment. “I guess I’d say I’m sort of cautiously optimistic at this point.”
“Clearly, my model did not account for website problems, so I’m actually pretty impressed that it came as close to that, given the problems the state faced,” Gruber, who helped design the Affordable Care Act, added. “Given the unforeseen website problems, I think 50,000 is pretty darn good.”
MNsure officials recognize that making it through open enrollment was just the first step in a much longer and more arduous path toward fully fixing the marketplace.
The most pressing matter is finding a new lead vendor to guide long-term technical fixes, plan for additional web functionality, and manage the project as a whole.
Contract negotiations have stretched on for more than a month longer than exchange officials had originally hoped, but they insist the search will be over soon. So far, there’s been no indication which company will come in to fill the void, or how much the fixes will cost. MNsure has earmarked at least an additional $12.5 million in its 2015 budget for technical infrastructure, spokesman John Schadl said.
Beutner said one big task moving forward will be to automate the manual processes that currently keep MNsure running. Backlogs around the Dec. 31 enrollment deadline led to special agreements with two state unions that ended up costing hundreds of thousands of dollars in overtime.
The Department of Human Services is working to implement a Basic Health Program, the next iteration of MinnesotaCare, for 2015. Following final federal guidance in March, the agency estimates it could get roughly $155 million more than projected in February if the feds approve the details of Minnesota’s proposal.
Interim MNsure CEO Scott Leitz said adding functionality such as a dedicated portal for navigators and brokers to assist consumers in securing coverage remotely is another top priority. That feature has been consistently pushed back since MNsure opened in October. Dedicated access is the top priority for organizations and businesses that are tasked with helping people enroll in coverage, but they have been hamstrung by technical limitations.
Alycia Riedl, president of the Minnesota Association of Health Underwriters, a broker trade group, said conversations with MNsure staff have raised concern that there won’t be enough time before the next enrollment period to give navigators and brokers access into the exchange’s system. But, she said, leadership appears to be taking the issue seriously because they need brokers and navigators to get enrollment numbers up.
“The sentiment is that they want it done,” Riedl said, “but I don’t know on execution if it’s truly going to happen or not.”
Legislative Auditor Jim Nobles is currently working on an audit of MNsure to ensure that the exchange is effectively spending the federal funds that paid for its construction. Nobles said he would like to do a more in-depth investigation into MNsure, but added that such a move would have to be approved by the Legislative Audit Commission, which has placed such an investigation on its short list of potential projects for the coming year.
“I think it’s likely,” Nobles said. “MNsure is currently the leading candidate.”
Nobles said the potential audit would be a wide-ranging look at how MNsure has functioned. His team’s evaluation would look back at how wait times in the exchange’s call center reached 90 minutes, how effective the exchange’s now-defunct Paul and Babe marketing plan proved to be, how the website functioned and whether the controversial outreach grants that were announced in August were effective.
On top of the audits, political scrutiny abounds. Leitz was called to Washington, D.C., on Thursday to testify with a group of other states’ exchange executives in front of the House Oversight and Government Reform Committee.
Though he escaped relatively unscathed compared with officials from Maryland and Oregon, Leitz still faced pressure from U.S. House Republicans about bonuses to MNsure employees last year, and about lost consumer applications.
“We were happy to participate in the hearing and provide an update on where Minnesota is at,” Leitz said shortly after the hearing on Thursday. “Minnesota had a good story to tell.”
Exchange leaders will also face state legislators soon. The board passed a preliminary budget for 2015 that it has to bring to the exchange’s Legislative Oversight Committee. MNsure has said that it based its 2015 budget on 40,000 enrollments this year, which it has already surpassed. If their recent press conference was any guide, Republican lawmakers on the committee will continue to apply the heat.
“The open enrollment was the first act in a several-act play,” Beutner said, “The first inning or two of a baseball game. This has never been about what can you do in the first three months or what can you do in the first six months.
“The legislation that we’re charged with implementing is a sea change in this country.”[Editor's note: This story has been updated to fix a misstatement regarding Minnesota's projection of federal Basic Health Plan dollars available to the state.]