Switching from MNsure to the federal government’s health insurance exchange would cost the state an extra $5.1 million over a one-year period, according to an analysis presented Friday.
The report also found that dropping the state’s exchange in favor of a “state-supported” marketplace — where Minnesota would retain some exchange functions, while using the federal government’s IT system — would cost an extra $6.6 million during the 12-month period ending June 2017.
The numbers from the state Department of Human Services (DHS) were presented Friday to a subcommittee of the state’s Health Care Financing Task Force, which the Legislature created earlier this year to consider options for MNsure.
Lawmakers created the task force in the wake of the exchange’s rocky rollout. In response, Republicans called for switching to the federal government’s HealthCare.gov website, while DFLers called for dumping MNsure’s outside board and making the exchange more of a traditional state agency.
Lynn Blewett, a University of Minnesota health policy professor who is chair of the subcommittee, said the numbers presented Friday didn’t tally the cost of making MNsure’s IT system fully functional. So, the analysis doesn’t point to any clear answer, Blewett said, about whether the state should stay the course, switch to HealthCare.gov or adopt the hybrid approach.
“People want to know can we fix MNsure … in a reasonable amount of time, at a reasonable cost?” she said following the meeting in St. Paul.
Minnesota launched the MNsure exchange two years ago to implement the federal Affordable Care Act, which requires almost all Americans to have health insurance or pay a tax penalty. MNsure was plagued by a balky website and overwhelmed call center in its first year of operations, but has seen subsequent improvements.
For health insurers who sell policies through it, MNsure’s IT system is harder to work with than the system at HealthCare.gov, said Dannette Coleman, a senior vice president with Minnetonka-based Medica and member of the subcommittee.
The troubles for health insurers translate into problems for consumers, too, Coleman said.
Medica sells policies to individuals through MNsure, as well as through HealthCare.gov to shoppers in Iowa, Nebraska, North Dakota and Wisconsin.
“The technology is much simpler with the [federal exchange],” Coleman said. “You’ve talked about what is the cost of switching, but what additional investment are you still having to make?”
The DHS analysis assumed the earliest the state could move to HealthCare.gov is 2018, since a one-year advance notice is required.
The switch would involve just the portion of MNsure that individuals and families use to purchase private coverage; the portion for enrolling in public health insurance programs would still be operated by the state.
The analysis assumed that by using the federal exchange, the state would lose federal funding for continued improvements to the public program part of MNsure, said Chuck Johnson, the DHS deputy commissioner.
Moving to a state-supported marketplace would cost more than a move to HealthCare.gov, Johnson said, because Minnesota would need to cover about $1.7 million for certain consumer assistance and plan management responsibilities.
Sen. Michelle Benson, R-Ham Lake, asked whether moving to HealthCare.gov might free-up IT resources so the state could make quicker fixes to the portion of MNsure for public programs. County workers continue to struggle with using MNsure for people near or below the poverty line who qualify for Medical Assistance.
Johnson said it’s not clear if there would be an advantage, because moving to HealthCare.gov would require the state to invest IT resources in making a connection with the new system.
Another wrinkle, he said, is that it’s still not clear when HealthCare.gov might be able to accommodate people who qualify for MinnesotaCare, which provides coverage for the working poor. HealthCare.gov directs people at those income levels into the market for private insurance policies, Johnson said.
Sen. Tony Lourey, DFL-Kerrick, said “it would be a real gamble, at best,” to think HealthCare.gov would be ready by 2018 to work with the MinnesotaCare program.
The subcommittee has not yet developed a recommendation on the future of MNsure. When it does, the matter goes to the full task force, which is scheduled to make a recommendation to the Legislature by Jan. 15.
After Friday’s meeting, Benson said she thought HealthCare.gov was looking like a less attractive option, although she said more information is needed to fully evaluate it.
“However, I would like to consider the third option,” Benson added, “of having a private stand-alone entity” handle the private insurance portion of MNsure.