The newly named board overseeing Minnesota’s health insurance exchange got its first view into the finances of the operation on Wednesday, including the years 2015 and beyond when federal money dries up and the exchange must be fully self-supporting.
Known as MNsure, the online marketplace is expected to cost $58.1 million to operate in 2014, with a heavy front-end investment in technology.
The state will fund the operation with federal grants, a tax on premiums and matching federal funds that help pay for health care for poor and moderate-income families. It also could consider a one-year loan from the state, MNsure executive director April Todd-Malmlov told the board.
In 2015, the first year without federal support, the state will be able to raise the amount of tax it collects on premiums to help fund a projected budget of $54.7 million. Premium tax collections could potentially rise again in 2016, raising up to $168 million a year.
In the first year, state officials estimate as many as 975,000 people, at the high end, will come to the MNsure exchange. About two-thirds of those will be Minnesotans eligible for the publicly funded programs, Medical Assistance or MinnesotaCare.
Within two years, officials expect 1.3 million people, about one in five Minnesotans, will use the exchange to shop for health insurance.
Last week, nine private health insurers submitted plans for the first year of the exchange.
Established by the Affordable Care Act, the exchange is aimed at helping those who don’t get coverage at work as well as small businesses, which have faced higher premiums than larger firms with a bigger pool of employees.
Staring Oct. 1, consumers will be able to log onto the MNsure exchange website or call a toll free number to determine eligibility for government programs as well as for tax credits or government subsidies to help make insurance more affordable.
All Minnesotans will be required to buy insurance or pay a penalty starting in 2014, and the state is making big plans to get the word out. The budget sets aside for $7.9 million for a widespread marketing campaign on radio, TV, newspapers, billboards and social media.
Meanwhile, the growing MNsure staff is using every inch of available office space, Todd-Malmlov said. The operation will soon move into a former furniture store in downtown St. Paul across from its current home in the Golden Rule building. The MNsure staff is expected to grow to 57.