Hey, kid, want some health insurance?

For some Minnesotans, the launch of the state health insurance exchange on January 1, 2014 will seem like the solution to one of their biggest problems in life. Thanks to a key provision in the Affordable Care Act, commonly known as “Obamacare,” uninsured people with preexisting conditions will be able to shop for and buy insurance in a way that had previously been denied to them.

But for other people, the exchange, which will operate under the name MNsure, is more of a curiosity than a godsend. Young and healthy Minnesotans who don’t currently have health insurance through their employment would be eligible for enrollment in the exchange. Alternatively, those potential consumers could choose to opt out of coverage and pay a penalty of $95 or 1 percent of their annual income next year, whichever amount is higher.

Experts and key decision makers say convincing some number of this sector of the population is hugely important for the exchange’s operation. If the enrollment among individuals tilts too heavily toward the old and the sick, observers say, the exchange will operate at a loss, and the costs would ultimately be passed on to consumers in the form of higher premiums. Rep. Joe Atkins, DFL-Inver Grove Heights, a chief author of the enacting legislation that Gov. Mark Dayton signed into law in March, said the subject addresses the very nature of insurance.

“Quite frankly, that’s an issue that has been in existence since long before anyone even uttered the word ‘exchange’,” Atkins said. “The idea of a risk pool that’s balanced, and has young and healthy members to it, is fundamental to any sort of offering.”

When open enrollment begins on October 1, a legion of advocacy groups, including nonprofit organizations and churches, will undertake the task of communicating with and registering the sick and needy individuals who aren’t currently insured. Meanwhile, the more difficult assignment of persuading healthy consumers falls to the state, which has already retained marketing and communications firms to craft outreach campaigns.

Peter Mitchell, whose consulting firm SalterMitchell conducted an extensive survey of uninsured Minnesotans last year, said that effort is crucial to the exchange’s success. What’s the right approach?

“That’s the million, or should I say, the multimillion-dollar question,” Mitchell said. “Because these are the people that are going to determine how the insurance companies price their products.”

Attracting the young

Of the estimated 1.3 million people who will purchase insurance through MNsure by 2016, nearly 900,000 will do so through the state’s public health insurance plans, Minnesota Care and Medical Assistance. Another 150,000 expected participants will be enrolled through their small-business employer. The remaining 300,000 will be individuals, some of whom had insurance coverage and then lost it, while others, particularly the young, might never have been insured.

Sen. Tony Lourey, DFL-Kerrick, who carried the legislation in the upper chamber, said the makeup of the enrolled consumers was a “real focus” in discussion of the exchange. Some portion of the uninsured population, a group that includes an estimated 160,000 Minnesotans, are too skeptical, if not outright hostile to the healthcare reform law, and will choose not to register with the exchange. But Lourey is confident that a majority of eligible consumers will partake, especially because “the lion’s share” of young consumers make less than 400 percent of the federal poverty level – or $45,960, based on the 2013 poverty guideline of $11,490 – and would qualify for subsidized care.

“The exchange was designed, and Minnesota’s embracing of the Affordable Care Act was especially designed, to make sure we have the broadest outreach possible to bring people in,” Lourey said.

In looking back on his findings for Minnesota, Mitchell, the outside consultant whose firm surveyed potential consumers, said most of the people in the “young, healthy and confident” category, which constituted 20 percent of the uninsured respondents, haven’t made up their minds about the exchange. In the firm’s detailed analysis, the majority of that group fell into two middle categories, indicating they didn’t particularly like or dislike the exchange – not yet, anyway. Mitchell said that typically, “swing” respondents will take a side sooner or later.

“What happens in any campaign,” Mitchell said, “is people move out of those middle two boxes, and they move to the edges.”

MNsure director April Todd-Malmlov said the exchange is already working on efforts to pull those people toward a positive disposition. Mirroring efforts by the federal government to enlist star athletes like Lebron James to help market to young consumers, Todd-Malmlov said the state is in talks for similar assistance from Minnesota’s professional sports teams. MNsure also plans to form partnerships with colleges and universities, which have a built-in audience of young populations whose fall enrollment period coincides with open enrollment for the exchange.

Kate Johansen, a lobbyist for the Minnesota Chamber of Commerce, thinks the exchange’s first big hurdle will be getting enough consumer buy-in of any kind, pointing out that MNsure’s operations will be funded by a tax levied on products sold through the exchange. Aside from that basic requirement, Johansen said the state needs at least some success in reaching the diffuse group of the so-called “young invincibles,” whose participation in MNsure will help subsidize sicker and older consumers. She thinks that effort could prove considerably more difficult than finding those with long-term illnesses, some of whom are already served by advocacy organizations.

“There is no natural constituent group,” Johansen said. “There is no natural infrastructure to reach out to young people to get them to sign up for insurance.”

Well, maybe one: Todd-Malmlov said market research had indicated there is still a reliable pathway to young adults’ hearts and minds.

“Some research is showing that young people, in particular, trust their moms quite heavily,” Todd-Malmlov said. “So, we’ll see some of that woven in there as well.”

Dueling public opinion campaigns

At some point, the state might find itself in competition over public opinion. Americans for Prosperity, the libertarian independent expenditure group that lobbied heavily against passage of the federal legislation, has announced plans to launch a $1 million negative ad campaign that will soon be on the airwaves in seven states.

Mitchell said that due to the contentious political debate leading up to its passage, a “great political cloud” still hangs over many people’s thoughts about the law. For her part, Todd-Malmlov said she and her staff are already used to carrying out their work despite negative messaging from outside groups.

“We’ve been dealing with addressing controversy since the law passed,” she said. “It’s unfortunate if something like [a negative ad campaign] occurs prior to open enrollment, because, really, what we’re trying to do is get people coverage.”

Later this month, Atkins, Lourey and eight other legislators will convene a first hearing of the new MNsure Oversight Committee. That panel is charged with overseeing progress on budgeting, grant awards, technology infrastructure and enrollment, among other major aspects of the exchange. Atkins is currently pushing for the state to release detailed versions of the products that have been approved for sale in the exchange, arguing that the law allows for the plans to be publicized ahead of time, so long as the information doesn’t link individual plans to the insurance companies that will be offering them. The Department of Commerce has yet to announce whether or not it will release insurance plan details in advance.

Atkins argues that releasing the information could become a key component of convincing some of the less informed, or more skeptical members of the state’s young adult population.

“I think it’s critical to release some information, be that a summary or a range of rates,” Atkins said. “Most of the folks that I know that fall into that [young and uninsured] category are very price-sensitive. They’ll want to know what the plans are.”

Already, 30 groups have registered with the state to serve as “navigators,” and another 800-plus insurance brokers have registered to sell the products. Those actors have an incentive to recruit from the pool of uninsured individuals: While navigators will receive $25 for registering a Medical Assistance or MinnesotaCare customer, the payment jumps to $70 for each individual registered with MNsure.

Todd-Malmlov thinks the currently uninsured will come around on joining the exchange when they begin to learn how easy it is to qualify for subsidized care.

Reflecting on his findings from last year, Mitchell said the state should market the exchange as giving individuals greater freedom of choice about their own coverage. People don’t want to be told what to do, but they’ll listen to what they can do on their own, he said.

“There’s a pent-up demand for insurance,” Mitchell said. “It skews sicker, generally, but it includes some healthy people. The trick is how you build on that to get people that are more on the fence to want to join the exchange.”