But 80% of early enrollees are on public programs; 1,800 private plans sold
Launched in the shadow of the spectacular malfunctions of the federal Healthcare.gov website, the first month of MNsure was, by comparison, a smashing success. Following a brief down period on the day of launch, and a few other technical snags along the way, most people visiting the state-run health insurance exchange say the website issues seem to have been ironed out by now.
What remains to be seen is whether MNsure is on the path to building a successful marketplace to buy and sell insurance plans. In its first month, almost 11,000 Minnesotans registered for coverage, picked a plan and established a payment process. But only 1,774 (16 percent) of the customers who have reached that stage are individuals buying insurance privately.
The vast majority of the first crop of people to sign up through MNsure were placed on public programs, either through Minnesota Care, which constitutes 22 percent of completed October enrollments, or Medical Assistance — the state’s Medicaid program — which accounted for the remaining 61 percent.
Peter Mitchell, a consultant who conducted market research for MNsure, said he’s not surprised to see that kind of demographic breakdown in the first wave of customers. He also said he would not be surprised if the individuals who have already registered to buy private insurance tended to be less healthy people, a prediction borne out anecdotally by local brokers. Minnesotans with the greatest need for coverage were probably first in line, and more willing to persevere through website glitches, Mitchell guessed.
Younger and healthier customers, whose participation is necessary to help keep premium costs down for other consumers, are more likely to wait to sign up until faced with a deadline.
“I think from a technical standpoint, they can be relatively proud,” Mitchell said of MNsure. “From a recruiting standpoint? We’ll see.”
Premature to assess results
Just when, exactly, Minnesota can begin to take stock of its results is a matter of some debate. In announcing the October figures to the MNsure board of directors, executive director April Todd-Malmlov pointed to the short-term progress that occurred in the second half of the month. In the first two weeks of open enrollment, only 3,769 had people completed the process. The rate of enrollment more than doubled the following two weeks, and the number of private customers jumped by more than 300 percent.
Steve Parente, a professor at the University of Minnesota Carlson School of Management, said Minnesota’s enrollment is better than comparable figures he’s seen from other states. Parente thinks the low rate of paying customers is to be expected, and proves that the state’s highly publicized advertising and marketing campaign, which featured Paul Bunyan and Babe the Blue Ox, was not successful at reaching its target audience.
“When it comes right down to it, health insurance is not a very sexy product to sell,” Parente said.
Beyond that difficulty, MNsure’s launch also occurred under a cloud of negative press regarding the federal rollout, which some people probably conflated with the local exchange. Parente thinks a good benchmark for progress might come in early- to mid-December, after potential consumers have gathered with their families for Thanksgiving — a setting in which discussions about lifestyle and consumer choices often occur.
Industry watchers are also looking forward to the wintertime. Geoff Bartsh, a vice president of public policy with Medica, said insurers would not know much about their new clients until January 1. MNsure has yet to send enrollment files to Medica, and Bartsh said the company would essentially have to learn about its customers by tracking their usage after coverage kicks in next year. “It’s going to take a while before we get a sense of who’s in, what they bought, and why,” he said.
Peter Mitchell’s pre-launch market research suggested that the greatest pent-up demand was among people who were “just on the edge” of qualifying for subsidized public health insurance. Many of those people would now qualify for coverage under the expanded Medical Assistance program, which goes into effect on January 1.
Young and healthy consumers — sometimes referred to as the “invincibles” — were found to be less eager to obtain insurance. Mitchell argued that the state can still work to bring build interest among these consumers. Much of successful marketing usually comes after a product launch, he said, when an organization can gauge public reaction and tailor its messages accordingly.
MNsure has spent its existing mass media funding from the federal government, but its 2014 budget includes more than $2 million for additional marketing and community outreach efforts.
Mitchell guessed that healthier consumers probably won’t feel pressured to sign up until closer to the open enrollment deadline of March 31, past which date they would need to pay a small penalty for not having insurance.
That projection sounds about right to Jonathan Gruber, an economist from the Massachusetts Institute of Technology, whose research helped inform much of the legislative debate and administrative planning for MNsure. Gruber said Minnesota’s first month was “quite good,” compared to when Massachusetts introduced the exchange that later became the model for the Affordable Care Act, aka Obamacare.
As Gruber recalls, about 100 people bought insurance on the state’s exchange in the first month. By the time the year-end deadline approached, 37,000 people were insured through the exchange.
At its October board meeting, MNsure laid out ambitious goals for total participation during open enrollment. According to that document, the state is hoping that more than 125,000 Minnesotans will purchase insurance through the system by March 31, including about 69,000 buyers of private insurance. That kind of ratio of insurance purchases to public program enrollments would require a surge in interest among the uninsured, but Gruber said it’s reasonable to assume that will happen as the deadline approaches.
Parente thinks the open-enrollment deadline could bring more significant data to the discussion, but cautioned that some new insurance consumers might register and then drop out during the course of their first year rather than pay premiums.
For his part, Gruber thinks the early bean-counting at both the state and federal level is more political than practical. “This is not a process that’s measured in days and weeks,” he said. “It’s a process that should be measured in years.”
Through one month, the experience of broker Kelly Mulligan presents an interesting snapshot of the consumer experience in its infancy. Mulligan, who is based in St. Louis Park, said he’d run into a few problems using MNsure.org, but said things have been smoother since he switched from the Internet Explorer browser to Google Chrome.
Mulligan signed up eight customers for MNsure, and four have actually set a payment plan for their coverage. Two of the four completed packages were for people who have chronic health problems, and Mulligan described those purchases as “no-brainers,” with one individual set to save $500 a month on premium costs, while the other would pay $700 less through MNsure.
Mulligan has also assisted a young couple who are in good health and have never had insurance, though that couple has yet to take the final step.
“They’ve picked a plan out,” he said, “and I’m pretty sure they’re going to proceed with it.”