The debate is on at the Capitol over how to fix MNsure.

Last week, the Senate DFLer who crafted legislation to create the state’s health insurance exchange proposed scrapping the MNsure board and making the new marketplace a state department. The new GOP majority in the House, meanwhile, wants to help insurance shoppers bypass MNsure altogether, while a Senate Republican bill would carve out a place on an expanded MNsure board for at least one insurance industry representative.

The debate puts Minnesota lawmakers alongside peers in other states looking to improve health insurance marketplaces that have fallen short of goals.

“There are a number of states where either by documented shortcomings or structural experience, people are saying: We should look at doing something different,” said Richard Cauchi, who follows health insurance issues for the National Conference of State Legislatures. “However, there is no one option that states are considering.”

With nearly $190 million in federal grants, Minnesota launched the MNsure exchange to implement the federal Affordable Care Act, which called for the creation of health exchange marketplaces for all 50 states.

A minority of states opted to create their own health exchanges, while the federal government’s website serves as the exchange for more than 35 states including Wisconsin.

The exchanges are options for individuals who buy non-group coverage. They connect people with private coverage, plus federal tax credits that can significantly discount the cost of health insurance.

When the exchanges were beset by technical glitches with their launch in late 2013, politicians felt the heat.

Compared with last year, more people have been able to use the MNsure website to enroll in coverage during the current open enrollment period. Wait times at the MNsure call center have been much shorter than last year.

And there have been fewer mass technical problems, such as an infamous “black hole” that swallowed more than 2,000 applications.

But the exchange continues to encounter glitches.

Earlier in January, state officials disclosed a problem that has blocked some 7,500 people from using MNsure to enroll in public health insurance programs. Many website users have been frustrated by error messages, and smaller woes have affected dozens to hundreds of people. The exchange has struggled to send complete information about enrollees to health insurers.

Exchange officials announced this month another $34 million in federal funds for MNsure fixes, bringing total grant support for developing MNsure to about $189.3 million.

The bill introduced last week by Sen. Tony Lourey, DFL-Kerrick, would eliminate the seven-person MNsure board, and make the governor and Legislature more directly responsible for MNsure’s operations and budget. It’s a change that makes sense to at least one MNsure advocate.

“I think the public desire and perception — when there were challenges with the rollout — was for the governor and legislators to come in and fix it,” said Sarah Greenfield, health program manager at TakeAction Minnesota, which pushed for creating MNsure. “And that was not in their power to fix it.”

People use MNsure to buy private health insurance, but the majority of those who’ve used the exchange have landed in coverage through the state’s public health insurance programs. The public programs are managed by the state Department of Human Services, and having MNsure as a department “might allow for more seamless integration and coordination of those systems,” Greenfield said.

She added: “I don’t see [the bill’s] prime focus as an effort to get rid of the board. I think that’s a side effect of it.”

Health insurers don’t necessarily oppose the Lourey bill, but they’ve always supported having the exchange run by more of a public-private entity.

“You’re more likely to get transparency with some public board meetings going on, rather than just having things going on inside an agency,” said Julie Brunner, executive director of the Minnesota Council of Health Plans, a trade group.

Insurance agents question whether the bill would make MNsure more transparent, but said they’re still reviewing it.

“It’s a good signal that we’re going to make some changes,” said Christopher Schneeman, a member of the legislative committee with the Minnesota Association of Health Underwriters. “The challenge is: Are they going to be changes that start fixing things, rather than just rearranging the deck chairs.”

Agents like a bill from House Republicans that would have the state seek a waiver from federal rules, so that people could tap tax credits when buying off-exchange policies. But health policy experts question whether the federal government would grant such a waiver, since it could pull shoppers away from the new exchanges.

“I think it’s interesting, I just don’t know whether it’s allowed by the law,” said Stephen Parente of the University of Minnesota.

Among other proposals being floated at the Capitol is a Republican-based bill in the Senate to double the size of the MNsure board and reserve at least one seat for an insurance industry representative. DFLers are cool to that. Noting that county human service departments play a big roll in connecting Minnesotans with Medicaid health insurance, some argue that county representation is needed on the board.

Like Minnesota, most state-based exchanges were created as entities situated somewhat outside traditional government agencies, with leadership from a board of directors, said Austin Bordelon, a senior associate with the Leavitt Partners consulting firm. Currently, legislators in Hawaii and Oregon also are considering whether placing their exchanges inside state agencies would improve performance, said Bordelon.

But a change in governance structure isn’t necessarily a panacea, said Dan Schuyler, a senior director with Leavitt Partners. “If you have good leadership, good stewardship and innovative thought leaders in either one of those governance structures, you can have an effective exchange,” he said.

Lynn Blewett, a health policy expert at the University of Minnesota, said there’s an argument that exchanges can better function in the marketplace when they’re outside government agencies.

“The concern I would have if it goes into a state agency is that it may become even more political,” Blewett said. “You’re a state agency. You have to present your budget to the Legislature. If there’s anything that you need, that’s done in a political environment.”

Despite all the talk about MNsure reform at the outset of the session, there’s reason to think any changes will be modest, said Larry Jacobs, a political scientist at the University of Minnesota. Lawmakers in both parties have frustrations, he noted, but Republicans control the House while DFLers control the Senate.

“I’d be surprised if either the DFL or Republican proposals were passed as currently written,” said Jacobs, who studies health policy. “But I would not be surprised to see changes in the MNsure board, who’s on it and expansion of the oversight role of the Legislature.”


Twitter: @chrissnowbeck