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Published March 13, 2014, 08:11 AM

MNsure plans to spend $12.5 million for website, call center fixes

ST. PAUL – MNsure wants to spend an additional $12.5 million this year to continue repairs to its website and call center, officials said Wednesday, as they unveiled plans for a balanced budget in 2015.

By: Christopher Snowbeck, St. Paul Pioneer Press

ST. PAUL – MNsure wants to spend an additional $12.5 million this year to continue repairs to its website and call center, officials said Wednesday, as they unveiled plans for a balanced budget in 2015.

During a meeting Wednesday in St. Paul, the MNsure board approved a $39.8 million budget for next year that will be balanced if the federal government lets MNsure change the timing for when it can spend $5 million in grants.

Federal approval is likely, said Scott Leitz, interim chief executive officer at MNsure, because the state is seeking flexibility – not more money. But if federal officials object, MNsure will make spending cuts so it doesn’t need more funds from the Legislature, Leitz said.

Meanwhile, MNsure also is seeking federal approval to change its plans for spending grant funds this year, which would allow an additional $10 million for information technology (IT) and $2.5 million for better customer service operations.

“We’re going to be deliberately prioritizing areas that will provide a better experience for our customers,” Leitz said during a briefing Wednesday with reporters. “We do have to have federal approval for those reallocations.”

The Legislature created MNsure last year to implement the federal Affordable Care Act, which requires almost all Americans to have health insurance or pay a tax penalty. People can use the MNsure website to purchase commercial insurance policies, or determine eligibility for the state’s Medicaid and MinnesotaCare public health insurance programs.

Enrollment in commercial plans through MNsure has fallen short of expectations because of troubles with the website and call center. While both are improving, MNsure last month lowered its enrollment projections for the number of people signing up in commercial plans.

Low commercial enrollment creates a budget problem for MNsure, because starting next year it must fund operations by withholding up to 3.5 percent of premiums sold. Operations this year are being funded by federal grants – Minnesota has received about $150 million from the federal government to create the MNsure exchange.

MNsure’s website woes not only have frustrated consumers, but they’ve also prompted an outside consultant in January to recommend a range of fixes. The board met Wednesday in a private session to discuss strategies for negotiating a contract with a new prime vendor for the IT system.

Some of the $10 million going to IT fixes this year could pay for the prime vendor, officials said, but the figure shouldn’t be interpreted as the price tag for the job.

MNsure is cutting its budget this year for marketing and communications by almost $5.7 million. The exchange also is counting on about $5 million in savings because consumers aren’t using nearly as many health insurance “navigators” as expected when shopping for coverage. Finally, MNsure has accumulated “salary savings” in a number of budget categories because jobs went unfilled longer than expected.

Savings in the navigator budget prompted consumer advocates to speak out during Wednesday’s board meeting.

“We should not further punish consumers,” said Sarah Greenfield with TakeAction Minnesota.

But Leitz said the trim simply reflects the fact that relatively few consumers have been using navigators.

When the budget was established, MNsure expected about 50 percent of all those buying commercial plans through the exchange would use a navigator. But only 12 percent of consumers actually have done so, Leitz said, adding that the original navigator budget was also based on high enrollment projections that haven’t come true.

Even with the smaller budget number, MNsure will still have funds to significantly grow the program, he said. The new projection calls for about 25 percent of all commercial enrollees to use a navigator.

The budget approved Wednesday is preliminary and won’t be finalized until October. The board had to take action on the spending plan because MNsure is required to submit a budget to the Legislature by March 15.

So far, about 115,000 Minnesotans have used MNsure and are in the process of obtaining health insurance coverage. The tally includes about 82,000 who are enrolling in public health insurance programs and about 33,000 signing up for commercial health insurance.

MNsure expects a surge in activity this month as consumers rush to beat a March 31 deadline for obtaining coverage to comply with the federal health law. The health exchange has launched a new awareness campaign connected with the deadline, Leitz said, adding that more than 850 enrollment events have been planned across the state.

People who don’t have coverage could be required to pay a penalty that’s 1 percent of their yearly household income, or $95 per person per year – whichever amount is higher.

The Pioneer Press is a media partner with Forum News Service.

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