State paying $850k for MNsure alternative on MinnesotaCare notices

The state is spending about $850,000 to upgrade an old computer system for sending premium notices next year to people in the MinnesotaCare health insurance program.

This summer, the state Department of Human Services announced it would switch to the old system after concluding MNsure could not accurately and reliably generate bills for enrollees in the program.

MinnesotaCare provides health insurance to people with incomes up to twice the poverty line — a group that's commonly referred to as the "working poor."

With about 110,000 enrollees, MinnesotaCare collects premiums of anywhere from $0 to $80 per month depending on income, but thousands of enrollees haven't received bills.

"It's been frustrating that we haven't been able to deliver on this aspect of MinnesotaCare," said Sen. Tony Lourey, DFL-Kerrick. "We haven't been able to get accurate, consistent invoices to enrollees."

It's still not clear exactly how much money has gone uncollected, state officials say.

"It's just another example of how terribly tragic this whole MNsure system is," said Rep. Greg Davids, R-Preston. "Is the state out $5 million? $10 million? $15 million? We don't know."

In 2014, MNsure decided to stop using its system for sending premium invoices to people buying private coverage, since private insurance companies could do the job.

This year, state officials decided that fixing MNsure for MinnesotaCare invoices would take more time, at a greater cost, than switching to the old system. Costs associated with the switch were disclosed by the state's MN.IT department in a memo sent this month to legislators on a MNsure oversight committee.

"The evaluation for moving to the [old system] was based on a number of factors including time to implement, confidence in implementation dates as well as cost," MN.IT said in a statement.

Lourey, however, said he didn't think cost drove the decision, so much as the need to prioritize other IT fixes within the MNsure system.

"There are a lot of high-priority items that still need to be addressed," Lourey said.