Facing a projected $21 million drop in premium collections, the state plans to stop using the MNsure system for sending invoices to people in the MinnesotaCare health insurance program.
Troubles with the billing system emerged in 2014 when the state started using MNsure for invoices in MinnesotaCare, a program that offers subsidized coverage for lower-income residents but that requires many to pay a premium.
Invoices weren’t sent for the first three months of 2014, and there were inaccuracies and duplicates once the bills started going out, state officials say.
There have been fixes since then, but the Minnesota Department of Human Services (DHS) decided this summer to take the job in-house for 2016 rather than try more repairs to the MNsure system.
With the problems, the state estimated a drop in MinnesotaCare premium collections of about $6 million for the two-year period that ended in June, and another $21.3 million in lost revenue projected for the two-year period beginning this month.
“Certainly from a business perspective, we’ve been very concerned about the fact that we haven’t been able to accurately bill and collect the premiums for MinnesotaCare,” said Chuck Johnson, deputy DHS commissioner, in a Friday interview. “While we made some improvements during 2014, we’re not where we need to be.”
Minnesota launched the MNsure exchange in late 2013 to implement the federal Affordable Care Act, which created exchange marketplaces for individuals buying private health insurance.
Minnesota’s MNsure exchange performs that function, and it also serves as the new enrollment and eligibility system for MinnesotaCare and the state’s Medicaid program.
About 117,000 people were covered through MinnesotaCare as of June, according to the DHS, and premiums in the program have ranged from $0 to $50 per month. Premiums cover about 4 percent of MinnesotaCare’s program costs.
Paying premiums back
DHS Commissioner Lucinda Jesson and Tom Baden, the state’s MN.IT commissioner, told legislators in a letter earlier this month that the department was bringing premium billing back in-house for 2016. “In addition, we are currently reviewing options for reconciling outstanding premiums,” they said in the letter.
The reconciliation process will address two distinct issues.
The first is the set of invoice problems in 2014 that resulted in the projected declines in premium revenue.
The second issue was disclosed earlier this month when the DHS said a backlog of 180,000 public health insurance renewals had built up due to technology problems in the MNsure system. As part of the backlog, the state has not sent premium notices for 2015 for about 55,000 MinnesotaCare cases.
It’s not clear how much money has gone uncollected as a result, but advocates for those covered by MinnesotaCare are nervous.
Eligibility for the program varies by family size and composition, but individuals with annual incomes of between $15,654 and $23,340 can qualify for MinnesotaCare coverage. At those income levels, it’s tough to save up money to pay for back premiums, said Ralonda Mason, an attorney with Mid-Minnesota Legal Aid in St. Cloud.
“This is taxpayer money, and the push is going to be that it needs to be paid back,” Mason said. “In the aggregate, I don’t disagree with that.
“The problem is, this is a system failure — recipients never knew the amount of the premium they were supposed to pay, and paying back months of premium payments is going to cause harm to these families,” she said. “That’s not OK with me.”
Deanna Claybaugh, 47, of Excelsior says that she wants to pay her family’s share for MinnesotaCare coverage, but that she has repeatedly been told not to send money until she gets an invoice. Claybaugh says that she has had coverage through the program since January 2014, but that she has received premium invoices for only a few of those months.
“I just need to know what that amount is,” Claybaugh said, “and I’m not sure when they’ll be able to tell me.”
To address the lost premium revenue, the state will create payment plans with beneficiaries, the DHS’ Johnson said, so the costs are spread over time. Many details haven’t yet been finalized, but Johnson said the plan “is not to make past or future coverage contingent on paying off that amount.”
State officials say they’ve been encouraging MinnesotaCare beneficiaries to pay their premiums even if they aren’t getting invoices, but three people contacted the Star Tribune in the past week to say that’s not what they’ve been told.
Johnson said he couldn’t explain the apparent discrepancy, except that particular circumstances mean some individuals might be told not to follow the general advice.
The projections for reduced MinnesotaCare premium revenue come from state financial forecasts that were published in November. Based on those forecasts, the Legislature covered the gap, Johnson said, by appropriating more money from the state’s Health Care Access Fund.
Revenue to the fund comes from a 2 percent tax on health care providers, a 1 percent gross premium tax, MinnesotaCare enrollee premiums and federal funding.
“There’s some lost revenue here, which means more of the cost rolls back to the state to fund,” Johnson said. “The premium revenue is not a huge part of the budget, and this is only a fraction of that.”
From its inception, MNsure has been a focus of political fights, with Republicans this year calling for a shift to the federal government’s healthcare.gov exchange for private health insurance. For public insurance, Republicans say the state needs to look at what can be salvaged from the $200-million-plus investment in MNsure.
Sen. Tony Lourey, DFL-Kerrick, said he hopes the premium revenue that has been lost from projections will be found “now that DHS is taking that back over with a system that has worked in the past.”
The problems with MinnesotaCare invoices, and the backlog of 180,000 public health insurance renewals, clearly point to issues with the MNsure IT system for public health insurance programs, said Lourey, who carried legislation in the state Senate during 2013 to create MNsure. Looking forward, Lourey said, he’s optimistic that the state now is on a path to resolving the issues.
“The invoices are going to go out,” Lourey said. “They’re maybe not going to be perfect, but they’re going to be a lot better than they have been. And this backlog will get processed.”