The organization that is supposed to usher Minnesotans into a new era of health care, helping them navigate choices in quality and affordability as easily as they choose airfares and hotels, instead is struggling to recover from a series of embarrassing blunders and mistakes.

Botched grants, an unnerving data security breach involving more than 1,000 Social Security numbers, and ridicule from some quarters over a multimillion dollar advertising campaign have left officials for MNsure scrambling to restore public confidence less than two weeks before a closely watched launch of the only state-run health exchange in the Midwest.

Officials say that given the tight time constraints of an Oct. 1 start date, they are hoping to “fail fast” and “fix it fast.”

Brian Beutner, head of the MNsure board, said that despite missteps, the agency will be ready to launch the MNsure exchange on time, with backup plans in place.

“I’ve been involved in a lot of start-ups and this is how it goes,” Beutner said. “You throw it out, see what works. If it’s not working, fix it. That’s what we’re seeing now.”

But some legislators say the problems go deeper. In a letter to Gov. Mark Dayton earlier this week, Reps. Greg Davids, R-Preston, and Peggy Scott, R-Andover, said “the problems are of MNsure’s own making.” In the letter, they noted that MNsure had obtained “at least 21 whole or partial exemptions from the normal rules governing state agencies, including procurement and financial oversight. This affords it unprecedented latitude to set its own policies, but it appears MNsure may be incapable of completing the job.”

MNsure is no ordinary start-up. The new state-run exchange already has received more than $140 million. Ultimately, one out of every five Minnesotans -- about $1.3 million -- will rely on the system for one of the most important choices they face as consumers.

At a hastily convened meeting Friday, the MNsure board tried to determine whether the recent flubs were growing pains or signs of deeper problems within the system.

April Todd-Malmlov, MNsure director, sought to reassure board members, noting that the staff member who inadvertently released the Social Security numbers is no longer with the agency.

She also acknowledged that an internal review showed that the agency didn’t even have to collect the Social Security numbers.

By meeting’s end, some board members were suggesting that the best course might be to maintain the Oct. 1 launch date but de-emphasize it a bit.

Said board member Thompson Aderinkomi: “There’s nothing wrong, actually, in asking people not to sign up right away.” And board member Tom Forsythe, vice president of global communications for General Mills, said he would encourage Minnesotans “to not call on Oct. 1” as a way to manage the initial load.

The health insurance mandate that includes penalties for those who fail to obtain insurance doesn’t kick in until March 31.

Dayton, who has been a strong supporter of the federal health reform, said that he is watchful of the program and wants it to succeed and that stumbles are to be expected.

“There are people out there who just want to destroy the health exchanges,” Dayton said, “who want to destroy the Affordable Care Act and leave this country with no health system at all and turn it back over to the insurance companies and do whatever they want to do.”

MNsure, he said, “is starting a huge business from Day One in the public spotlight. … I will be the first to criticize something I think is wrong, but I don’t want to see the whole program destroyed.”

The Affordable Care Act, often called Obamacare, was signed into U.S. law in March 2010, but it has been dogged by controversy and lawsuits that have delayed portions of it.

Just last week, the U.S. House voted for the 42nd time to defund it — a vote that is expected to fail again in the Senate. The Minnesota Legislature, which was in GOP hands when the law was first passed, did not give the go-ahead to form a state exchange until this March, when DFLers were in control.

Much of the initial start-up work was accomplished before then only because of an executive order Dayton had issued earlier that Republicans were powerless to block.

Some successes

The agency has had some successes along the way. MNsure announced this month that it will offer the lowest average rates in the country, compared with plans offered on nearly a dozen other exchanges, and that it will have some plans with premiums as low as $91 per month.

Yet there also have been high-profile gaffes and missteps that have sent MNsure staffers scrambling like a NASCAR pit crew on damage control.

When lawmakers pointed out that the $4 million in community outreach grants announced by MNsure earlier this month had largely shut out groups with established outreach into minority communities and those who work with people with mental health issues, the agency pivoted quickly to free $750,000 from its budget to expand the grant program.

Paul Bunyan’s bearded face already beams out from billboards, bus ads and television commercials around the state, urging Minnesotans to log onto MNsure to get health insurance.

But not everyone has been charmed by the marketing theme — including some officials in the iconic statue’s hometown of Bemidji — and MNsure’s attempts to keep its marketing strategy secret were soundly slapped down by the state.

When a MNsure staffer mistakenly sent an insurance agent a file that included the Social Security numbers of some 1,600 other brokers, the agency drew criticism from Minnesota to Washington, D.C., and the scrutiny of the state's legislative auditor, who has started his own investigation.

On Tuesday, MNsure officials will face a fresh grilling at an emergency meeting of the Legislative Oversight Committee, called after the latest problems.

MNsure’s data breach hit a particularly sour note with Rep. Scott. After listening to Todd-Malmlov and others at Friday’s meeting, Scott proclaimed herself dissatisfied. The meeting, she said, “only raised more questions about MNsure’s lack of data security procedures. I’m anxiously awaiting the legislative auditor’s investigative report on this incident.”

She and other Republican legislators are urging the state to delay the MNsure launch until “they have these quirks worked out.” The whole thing, she said, “has been rushed since the beginning and when stuff is rushed, the end product — especially something this complex — is not good.”

Sen. Jeff Hayden, DFL-Minneapolis, said he was reassured by MNsure’s fast fix to his criticism of the agency’s lack of outreach into minority communities. He said making inroads in neighborhoods where health problems are common and good insurance coverage is scarce would take more than a Paul Bunyan billboard or a pamphlet in a neighborhood clinic.

“I really applaud them for kind of sitting there and taking their medicine, and turning around and doing something about it,” Hayden said. “I’m much more hopeful, moving forward, about MNsure and its access to communities of color.”

Under the microscope

MNsure’s repair work is happening under intense scrutiny. Nationwide, the exchanges will be a key vehicle for implementing the most sweeping elements of the federal health law, which remain unpopular with many Republicans.

In little more than six months, Americans will, for the first time, be required by law to carry health insurance.

Exchanges, whether run by the states or Washington, will be where the uninsured, the underinsured and small businesses can shop for coverage. Many moderate-income earners will be able to use the exchanges to access federal tax credits that lower their out-of-pocket expenses.

Dayton said the goal is important enough that the work must go forward, even with the knowledge that every mistake will be seized on.

“I wish I could say there weren’t going to be any more errors made,” he said, “but that’s just not realistic in any public enterprise in the public or private sector.”