Debating the right prescription for MNsure

The timing just wasn’t right. Sen. Michelle Benson, R-Ham Lake, said she had hoped to catch Sen. Tony Lourey, DFL-Kerrick, for a brief moment before or after a meeting on Thursday, and arrange a meeting where the two might begin to discuss how to address MNsure during the 2015 legislative session. As it happened, one senator was busy until the moment their shared meeting began, and the other had to dash off immediately after for another appointment.

According to Benson, she needs just “15 to 30 minutes” with Lourey, chair of the Senate Health and Human Services Finance Committee, to go over what she considers “essential” areas for legislative review. Benson need not worry. In a subsequent interview, Lourey confirmed there would be ample time to talk about MNsure.

“I’m not intending to make any attempt to try to shut down the conversation,” said Lourey, chief Senate author of the enacting legislation that was signed into law in 2013.

In the 18 months since passage of the legislation that enacted MNsure, discussion around the issue has largely mirrored the same scene on the federal level: Republicans attacked, and decried the system’s flaws, while Democrats defended, and touted its virtues. At the onset of the 2014 session, Democrats expressed disinterest in revisiting the controversial bill, saying the exchange should be given more time to work through issues like flawed technological infrastructure and enrollment shortfalls.

A patient approach was easier to adhere to with Democrats in control of the House, Senate and governor’s office. The passing of the 2014 campaign season, where Republicans won back control of the House, has brought a temporary cease-fire on many — though not all — of the most vocal calls from both sides. Legislative experts on the subject are hopeful that 2015 will bring a discussion aimed at learning and improving, rather than electioneering.

The assessment process might still be put off, though, as the exchange remains a moving target: MNsure is in the middle of its second open enrollment phase, which runs through mid-February. Just last week, MNsure revised its projected 2015 enrollment for private plans to 67,000, down from a previous mark of 100,000. The final figures, particularly those in private insurance coverage, will determine how MNsure sets its budget, which is supposed to rely on a 3.5 percent tax on private plans.

On a Thursday conference call with media, MNsure CEO Scott Leitz cautioned that the number of consumers would continue to shift throughout the year due to “life events,” such as a new job that comes with insurance.

“I would say that by February 15 we would have some sense of how we’re doing,” Leitz said, “but I don’t want to hold that up as the deadline.”

Lourey said the mid-February date is relatively early in terms of a legislative session.

“It’s rare that the policy deadlines are even up before that February 15 date, and that’s sort of when the budget committee begins our real work,” Lourey said.

As it stands, the participation rate should be a concern for the MNsure board and legislators, according to University of Minnesota professor Steve Parente.

“The hope is that [MNsure] would be self-sustaining, financially,” Parente said. “Right now the enrollment numbers don’t make it seem like that’s going to happen anytime soon.”

While they await the numbers, and MNsure’s revised budget, there should be plenty of other topics to consider.

Operational changes

Benson is confident that many Democrats, including some in the Legislature and Gov. Mark Dayton’s administration, will come around on proposals to make serious changes to MNsure’s operation. She named the exchange’s budget, governance and future regulatory power as top priorities for review in the coming months.

Republicans have long criticized the makeup of the seven-member board of directors — six appointees, plus the Department of Human Services commissioner — arguing that it wrongly disqualifies people with direct experience in the insurance industry. Benson also said the board is too powerful, as it currently has statutory authority for expedited rulemaking.

Instead, Benson said, power should be divested from the board and transferred to the legislative oversight committee. At present, that committee is co-chaired by Lourey and Rep. Joe Atkins, DFL-Inver Grove Heights, the chief House author of the MNsure bill. When the new Legislature convenes next year, committee leadership will alternate from Lourey to a Republican House member — likely either Rep. Joe Hoppe, R-Chaska, or Rep. Tara Mack, R-Apple Valley — who will lead the commerce and health and human services policy committees, respectively.

Lourey said it would be unfair to place undue blame on the MNsure board for technological problems seen during the rollout, and warned that the legislative oversight panel is bound by constitutional strictures on the authority given to a subcommittee or panel. With those caveats, he said he and other Democrats would be ready to explore a redesigned governance structure.

“I think a really good, healthy conversation could ensue around the governance,” he said. “Many in my caucus, myself included, are open to that.”

The membership and strength of the board would become exponentially more important should that body choose to pursue the role of “active purchaser,” which would allow the board to negotiate with insurance companies on which packages would be available. Earlier this year, the board, then under intense scrutiny, delayed a decision on invoking its active purchaser privileges. Benson said a full revocation of that possibility should “absolutely” be part of the legislative debate.

“I think [the board] had enough trouble just controlling this rollout,” Benson said. “For them to start picking winners and losers is beyond the scope of what they should be doing.”

Lourey seemed less inclined toward that notion — “to abandon active purchaser, at this point, would be very unwise,” he said — but expected it to come up at the Capitol, especially given the controversy over that topic in 2013.

“If the [Senate] floor debate on the bill took 12 hours,” Lourey recalled, “I bet six of them were about active purchaser.”

PreferredOne departure

The respective Senate leaders on the insurance exchange also expect to devote at least some time to the sudden departure of PreferredOne, the insurer that opted out of offering plans through MNsure in 2015. Lourey and other Democrats have chalked this up to PreferredOne’s own miscalculation, having set its own rates too low.

Fallout from the PreferredOne episode was the central theme of Leitz’s Thursday announcement to reporters, as he shared preliminary results of a forthcoming study from Wakely Consulting Group. That report found that MNsure consumers who qualify for subsidized insurance could save up to $311 per month buying a new plan on the exchange versus a renewal of their PreferredOne plans, where premiums are projected to rise an average of 168 percent. MNsure is working to lure back those customers with a widespread postcard, email and direct phone call campaign.

Between PreferredOne’s departure and the discontinuing of five other plans offered by other providers, some 28,000 MNsure users would be shifted out of the exchange unless they cancel their existing coverage and shop for a new plan.

Benson, meanwhile, said she doubts the contention that PreferredOne’s exit was a market self-correction, pointing to reports that the insurer cut its rates significantly under pressure from the Department of Commerce. In October, Benson filed a data request seeking the state agency’s communication regarding PreferredOne, and is still awaiting receipt of those records.

“I’m very much not sure when I’ll get it, or if I’ll get it,” Benson said.

As further evidence of the divided perception over MNsure, incoming House Speaker Kurt Daudt thinks the Department of Commerce has issued misleading information about premium rate changes for 2015.

“The commerce department comes out and says the rates are going to increase 5 percent, or 4 percent, when the actual increase in rates is 41 percent,” Daudt said during a legislative preview event sponsored by the Frederikson & Byron lobbying firm. “We can’t continue to pretend there’s not a problem.”

During the same event, Rep. Melissa Hortman, DFL-Brooklyn Center, said she agreed with statements from Rep. Tara Mack, R-Apple Valley, who, Hortman recalled, spoke about “fiscal accountability” during a recent appearance on Minnesota Public Radio.

“I think we could really partner on the fiscal accountability,” Hortman said.

Lourey, for his part, reacted with varying levels of interest in these suggestions, though he remains open to “meaningful reforms.”

Benson welcomed the invitation, and the challenge: “If you can get Tony Lourey and I to agree on something, it’s probably the right thing to do.”