ST. PAUL — Lackluster enrollment in private plans and drying-up federal funds may force Minnesota to pick up more of the tab for its health insurance exchange. 

MNsure would get another $11.7 million of state money under Gov. Mark Dayton’s proposed budget for technological improvements — a necessary change because public-plan signups have far outpaced private-plan enrollments.

The governor is also recommending the state assume costs the federal government covered until this year, such as $1.3 million over the next two years for staff to review rate submissions from insurance companies and another $558,000 to investigate complaints. Most federal funding has expired as Washington’s aim is to make state-run health exchanges self-sufficient.

Together, those changes would bring the state’s running costs for the exchange to at least $23.5 million since it was set up in 2013.

Republicans said the state chipping in more money proves their point that the exchange isn’t sustainable and needs drastic change.

“It’s not a surprise that’s happening, but it’s a hidden cost,” said Sen. Michelle Benson, a Ham Lake Republican.

House Republicans grilled officials from MNsure and other state agencies Thursday, pressing for details about how those additional funds would be spent on the struggling website.

“Will that fix the problems?” asked Rep. Joe McDonald, R-Delano.

Lawmakers set up MNsure mostly with federal funds, aiming to sign up Minnesota residents in both private plans and public programs for lower-income families like MinnesotaCare and Medical Assistance. State officials initially estimated about two-thirds of enrollments would be in those programs, with the remaining third in private plans. Instead, 91 percent of applicants have been placed in public programs, forcing the state to pitch in more money.

And the more people who sign up for public programs, the more the Department of Human Services has to match federal grants for operations and technology improvements. That means the state will pay 65 percent of MNsure’s operations, rather than the roughly 30 percent originally planned, according to budget documents.

Department of Human Services Lucinda Jesson defended the extra state costs as prudent, saying they free up much larger federal grants.

“While MNsure has had challenges, MNsure has been part of the reason that our uninsured rate has cut basically in half,” she said earlier this week. “I think that overall, it’s been a good investment. But I think we need to improve it, and that’s going to include some more state dollars.”

MNsure CEO Scott Leitz said additional funds would be used mainly on back-end improvements to ease data transfers to insurance companies and help county officials better access the system.

The exchange is supposed to sustain itself by skimming a fee off private insurance-plan signups. But those enrollments haven’t kept pace with projections: Late last year, the exchange cut its 2015 goal of 100,000 private plans down to 67,000.

MNsure officials say they’ve altered their budget to put the exchange on a steady financial course, upping its fee on premiums from 1.5 percent to 3.5 percent and scaling back costs. But their three-year budget plan hinges on continually adding more new members in private plans than enrolled the year prior.

While they acknowledged MNsure’s problems, several House Democrats called for patience. Some of the state’s extra costs are unavoidable, said Rep. Tina Liebling, DFL-Rochester, adding that the state would be signing up residents for public programs even if MNsure hadn’t been created, she said.

“Very few of us think this is a perfect option,” Liebling said.