MNsure board approves its preliminary budget for 2015

Published 10:56 am Thursday, March 13, 2014

ST. PAUL — The board of Minnesota’s new health insurance marketplace approved on Wednesday a preliminary budget for 2015 that officials said is balanced without seeking new federal or state money.

MNsure Interim CEO Scott Leitz told reporters at a briefing before the meeting that the proposed $39.8 million budget for next calendar year is based on the assumption that the federal government will let the exchange carry over $5 million in federal grants that have already been awarded but not spent.

“I think we have taken a fairly conservative approach in putting together this budget,” Leitz said. He said it assumes premium revenues will remain flat and conservative enrollment growth.

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MNsure must report its preliminary 2014 budget to the Legislature by Saturday. Board member Lucinda Jesson, the state’s human services commissioner, said this version is firm enough to submit to lawmakers, but insisted that the board revisit the plan frequently before it adopts the final budget in November.

“I have a lot of concerns,” Jesson said. “There are a lot of uncertainties in this.”

Legislators warned Leitz and other MNsure officials last month that they needed to find ways to cover a potential shortfall as high as $4 million that they feared could materialize for 2015. And they made it clear they were unenthusiastic about the prospect of allocating state money to fund the exchange, which is supposed to be self-supporting.

The MNsure staff also identified $18.5 million in cuts it plans to make from the current budget, if the federal government approves. It plans to reallocate $10 million of that to ongoing information technology improvements and $2.5 million to customer service to further address the problems that got the Internet-based exchange off to a rocky start when it was launched in October. That will leave about $6 million in reserve for unexpected needs this year, Leitz said.

“We’re going to be deliberately prioritizing areas that will bring a better experience for our customers,” Leitz said.

MNsure officials are confident the federal government will allow Minnesota to carry over the $5 million in grants into 2015, Deputy Director Wes Kooistra said.

About $22 million in revenue next year would come from signing up clients for public programs such as Medicaid, while nearly $12 million would come from MNsure’s share of premiums paid to private insurers.

MNsure’s budget for this year was originally set at $126.9 million, reflecting startup costs that won’t recur in future years. The planned $18.5 million in reductions come mostly from areas where officials budgeted more than has proved necessary, including $5.6 million for communications such as advertising that isn’t being spent, $4.9 million for navigators and brokers that customers aren’t using at nearly the expected rates and $2.8 million for appeals that customers aren’t filing, officials said.

The board gave a sympathetic hearing to several navigators, who said they’re a crucial component of MNsure’s outreach efforts to people who need help signing up. The navigators said they were alarmed by the planned spending reductions for them this year and next.

Leitz said MNsure’s original budget presumed more signups than have actually happened, and that half of the people enrolling would use the services of navigators. He said only about 12 percent of customers have done so, but that the 2015 budget presumes 25 percent will because of planned outreach efforts.

More than 118,000 Minnesotans had signed up for health insurance coverage through MNsure as of Tuesday. Call center volumes have shot up in recent days as two key deadlines loom, but the average wait time this week has been just 90 seconds, Leitz told the board. That’s down from 60 minutes or longer in December. Website error rates are down to their lowest ever, and pending applications have dropped by more than 95 percent since December.

March 31 is the deadline for all Americans to sign up for coverage under the federal Affordable Care Act without incurring tax penalties, and Saturday is the deadline for Minnesotans to enroll for coverage that takes effect April 1.