MNsure officials on Thursday again lowered the outlook for commercial enrollment through the state’s health insurance exchange, as board members noted the influence of both a strong regional economy and the relatively small number of Minnesotans who currently lack coverage.
The new three-year budget plan cuts by nearly 15 percent — from 152,000 to 130,000 people — the expected enrollment in private health plans through MNsure by 2017.
The latest plan, which the MNsure board approved Thursday by a unanimous vote, shows just how far off original estimates were for private enrollment through the exchange.
In the fall of 2013, MNsure projected that consumers would purchase more than 2.3 million months of private insurance through the exchange during 2016.
Now, MNsure expects to sell in 2016 not even half that much — about 1.1 million months of coverage.
The reality of lower commercial enrollment has brought a series of budget adjustments over the past 18 months, because MNsure must cover a growing share of its costs by withholding a portion of commercial premiums.
The latest reduction in enrollment projections, for example, brings a corresponding revenue cut of about $3.2 million over a three-year period stretching from July 2014 to June 2017. The shortfall will be balanced by spending cuts, said board member Tom Forsythe, who presented the budget plan during a MNsure board meeting Thursday in St. Paul.
Phil Norrgard, a MNsure board member who also worked on the plan, said one reason for MNsure to be cautious about projecting growth is the state’s strong economy, particularly in the Twin Cities metro. As the economy improves, more people get jobs that include health insurance, which “may make it more difficult for us to reach enrollment goals,” Norrgard said.
Forsythe called the new plan “reasonably optimistic, but appropriately prudent.” Board chairman Brian Beutner said he agreed, but noted that even the reduced target of 130,000 enrollees by 2017 means the exchange must more than double in two years its current tally of about 61,000 sign-ups in private plans.
During its first 15 months of operation, MNsure’s lack of commercial enrollment has meant that a greater share of those who’ve used the exchange have wound up in public health insurance programs. That shift, in turn, is part of the reason the state’s Department of Human Services is asking the Legislature for an additional $11.7 million over the next two years to fund its portion of MNsure.
On Thursday, MNsure board member Lucinda Jesson — who is also the state’s human services commissioner — voted in favor of the plan, but was careful to ask whether the budget’s reduced projection for growth takes into account “the really low number of uninsured in Minnesota.”
Forsythe said it does. But he acknowledged that the board’s finance subcommittee considered whether they should adopt even lower enrollment projections, which would have driven deeper budget cuts.
“There’s a downside to being conservative,” Forsythe said. “We could make it dramatically more conservative, but that also limits our ability to go after new enrollees.”
MNsure faced a challenge in growing enrollment for 2015, Forsythe said, due to the departure of PreferredOne, the insurer that in 2014 was by far the most popular option on the exchange. The budget plan going forward assumes that MNsure will have fewer challenges in retaining customers, he said.
Commercial sign-ups should improve because federal tax penalties for those who lack coverage get steeper in 2016, said board member Peter Benner, another member of the finance subcommittee. Plus, MNsure thinks outreach efforts next year will improve, Benner said.
With the reduced enrollment projections adopted Thursday, MNsure expects sign-ups to grow by 35,000 people — from about 60,000 to 95,000 — for 2016, and by another 35,000 people the following year. Between 2014 and 2015, MNsure’s commercial sign-ups have grown by around 13,000 people.
Under the new budget plan, commercial premiums would generate about $14.4 million in revenue during fiscal 2017, which would account for about 23 percent of MNsure’s total budget for the year of roughly $43.2 million.
While commercial enrollment was an area of focus during Thursday’s board meeting, MNsure chief executive Scott Leitz noted that sign-ups for public health insurance through MNsure continue to increase. Between Nov. 15 and March 8, 90,839 people have signed up for the state’s Medicaid program through MNsure, and 31,070 people have signed up for MinnesotaCare.