MNsure is cutting its projection for commercial enrollment next year by one-third and says it will make up the lost revenue by cutting costs and spending federal grant money at a faster pace.
Earlier this year, MNsure projected that about 100,000 people would buy private health plans through the state exchange by the end of 2015 — an estimate that amounted to a reduction from initial projections for commercial enrollment.
But now, MNsure is forecasting commercial enrollment next year of about 67,000 people, said Scott Leitz, MNsure's chief executive. A key driver is the absence from MNsure next year of PreferredOne, the most popular choice for coverage among those who bought commercial policies for 2014.
MNsure is counting on revenue from the commercial policies to cover a growing share of its budget over the next three years, and word of a lower enrollment projection prompted Republican critics of the exchange to question its finances.
"MNsure is just two weeks into its second open-enrollment period, and they've already reduced projected enrollment by 33 percent," Rep. Tara Mack, R-Apple Valley, said in a prepared statement. "It has become clear that MNsure is financially unsound and unable to fulfill its core mission of enrolling Minnesotans in health insurance."
The new enrollment numbers also raised concerns from Commissioner Lucinda Jesson, who runs the state Department of Human Services (DHS), which pays MNsure to determine eligibility and help people enroll in public health insurance programs.
The new enrollment numbers suggest that MNsure will collect "millions and millions" more in taxpayer money by way of the DHS, Jesson said during a MNsure board meeting Wednesday in St. Paul. After the meeting, Jesson said her concerns were focused on MNsure's budget after the current fiscal year ends in June.
"That's a sizable difference between the money that we were appropriated by the Legislature, that was built into our base, as opposed to what they're now projecting will be paid," Jesson said in an interview. "Before I would go and ask [the Legislature] for more money, I would want to carefully — almost line by line — go through what's being paid for."
Jesson said she didn't have a specific estimate for how much more taxpayer money would be needed. MNsure's budget is $85.8 million for the fiscal year ending June 30.
Joe Campbell, a MNsure spokesman, said public program enrollment through MNsure has been much higher than originally projected.
"It's just a process of figuring out how MNsure and the Department of Human Services are going to allocate these funds," Campbell said. "It's a complicated thing."
Minnesota began the MNsure health exchange last year to implement the federal Affordable Care Act, which called for new online insurance marketplaces for all 50 states. People use MNsure to buy non-group policies for themselves and immediate family members.
The rollout of MNsure last year was rocky and drove many consumers to skip the exchange and buy directly from health insurance companies. Technical problems with the MNsure website and its overwhelmed call center were key factors in explaining why the exchange fell short of original enrollment projections.
But this fall, the MNsure website is much improved, exchange officials say, and supporting a faster pace of enrollment in commercial coverage. During Wednesday's board meeting, Leitz said that 7,106 people had enrolled in private health plans through MNsure since open enrollment started Nov. 15 — a pace 17 times faster than last year, he said.
Even so, the exchange is lowering enrollment projections in order to work from a more "conservative" base, Leitz said, based on the experience thus far. Rather than attracting 50,000 new enrollees for next year, MNsure now expects 30,000.
Currently, about 50,000 people have commercial coverage through MNsure, and previous projections assumed the exchange would retain those customers. But with the absence of PreferredOne, the exchange now expects about 37,000 subscribers will come back.
"This is a balanced budget," Leitz said. "The original budgets were built on our best guesses of what enrollment would look like, but we actually have data now."
The move also seems to fit with a move this fall by the federal government, which lowered by 30 percent its projections for how many people would enroll in private health plans through exchanges nationwide.
MNsure will take public comment on its three-year budget plan this month, and the board will vote on the plan in January. On Wednesday, the board voted to approve changes to the health exchange budget for the current fiscal year.