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Leitz departure comes at another critical time for MNsure

Sen. Michele Benson, R-Ham Lake, said the turnover at the top of MNsure is a sign of “systemic failure,” and that Gov. Mark Dayton and DFL legislators “can’t hide behind their appointed CEO anymore.” (Staff photo: Bill Klotz)

Sen. Michele Benson, R-Ham Lake, said the turnover at the top of MNsure is a sign of “systemic failure,” and that Gov. Mark Dayton and DFL legislators “can’t hide behind their appointed CEO anymore.” (Staff photo: Bill Klotz)

MNsure is back at it, if it ever stopped, and is yet again finding ways of breaking. Breaking news, that is.

The latest twist in the health insurance exchange roller coaster came Monday with the sudden revelation that CEO Scott Leitz would step down from his post later this month. The news was not so much announced as ferreted out: The Associated Press first reported that Leitz would tender his resignation at a previously unpublicized board meeting later that day.

There, in a mostly closed session, and with few members available in person — others joined by teleconference — the board quickly took action, accepting Leitz’s resignation and appointing Allison O’Toole as his acting successor.

Leitz is leaving to accept a job as “chief transformation officer” with the Health Care Cost Institute, a Washington, D.C.-based think tank.

O’Toole has served as the exchange’s director for external affairs for just over a year, handling marketing and communications as well as liaison duties with the state and federal governments. Prior to that position, O’Toole was a director with the Himle Rapp & Co. public affairs firm; she has also worked for DFL U.S. Sen. Amy Klobcuhar and as an assistant attorney in the Hennepin County Attorney’s Office.

The sudden transition, announced and carried out in a matter of hours, was only slightly smoother than when Leitz himself had taken over. Formerly a deputy commissioner with the Department of Human Services (DHS), Leitz was appointed interim director in December 2013, following the sudden resignation of April Todd-Malmlov, the exchange’s original leader, who had faced negative press coverage and partisan criticism.

Leitz inherited MNsure at a critical point, just weeks before insurance plans went into effect. His exit is similarly timed at a pressure-packed moment. Leitz’s tenure will run through May 22, or just a few days after the scheduled adjournment of the legislative session, where lawmakers have produced radically different solutions for the exchange. House Republicans are pushing to close the state’s operation altogether and default to a federal exchange, but they would also seek a federal waiver for subsidies on plans sold outside of MNsure.

Senate Democrats have sided with Gov. Mark Dayton, backing the creation of a task force to study alternatives. While that group would work toward recommendations due next year, the exchange itself would undergo immediate changes, becoming a more traditional state agency, with a commissioner position subject to appointment by the governor. Under the current governance, that authority is vested in the board.

The board itself is also in flux. The two members whose terms expire this month, including Brian Beutner, its chairman, have said they will not seek another stint. Other members have terms that extend into 2016 and 2017, though the board’s authority is expected to be advisory only by that point, if its existence is preserved at all.

Sen. Michele Benson, R-Ham Lake, a frequent critic of the exchange, said the turnover at the top of the exchange is a sign of “systemic failure,” and that Gov. Mark Dayton and DFL legislators “can’t hide behind their appointed CEO anymore.”

Reached Tuesday, Rep. Matt Dean, R-Dellwood, chair of the House Health and Human Services Policy Committee, was hardly more measured in his comments.

“It’s troubling,” Dean said. “MNsure has obviously been a disaster from its rollout, and its implementation. Unfortunately, this signals more bad news for Minnesota policyholders, that the future is more uncertain.”

Dean said he had no advance warning that Leitz planned to step down. Dean complimented Leitz as a “very capable person” who was handed a difficult task, but said the exchange was still grossly underperforming, with enrollment figures well below projections and counties, insurance companies and customers frustrated by their experience.

“It shows that MNsure is in real trouble,” Dean said. “The last couple years, policymakers have been in denial about that, and it’s hurt Minnesotans. We can’t have another two years of denial.”

Jim Schowalter, president and CEO of the Minnesota Council of Health Plans, said Leitz had been given the unenviable task of “stabilizing an operation in an ultrapolitical environment,” and had performed well under those conditions.

“The part I think people don’t understand is, this is a completely new venture,” Schowalter said. “It’s a startup, and startups tend to be intense, and burn quickly, and they tend to have multiple people taking it further.”

Schowalter acknowledged that the resignation could complicate discussion over reforming MNsure’s governance, or making Leitz’s position an appointed commissionership — “I’m sure those questions will be raised,” he said — but said “nuts-and-bolts” issues of functionality should receive more attention.

“The governance of MNsure shouldn’t be determined because [Leitz] is in place, or anyone else,” Schowalter said. He added: “The governance of this organization is less important than the functionality of it, and that’s really the critical task for the next six months, before the time they open the next open enrollment.”

The timing of Leitz’s announcement coincided with a particularly sensitive moment in negotiation. Dean and Sen. Tony Lourey, DFL-Kerrick, convened their first health and human services conference committee on Tuesday afternoon, setting the stage for a negotiation that could determine MNsure’s long-term future.

As the conference committee got underway, Lourey, reiterated a Senate position that budget bills be preserved as free of policy-only provisions, saying he hoped members would “find other vehicles” to introduce policy changes.

Lourey intimated that the committee would start with a relatively light, but thorough first day, passing through the side-by-side spreadsheet comparison, though he said he expected to ask “fairly significant questions” about projected “savings” used to close budget shortfalls in the House bill.

Dean, in turn, telegraphed some of his concern with the Senate bill, saying, “I’m sure that we’ll have a lot of discussion about the savings — as well as some of the spending.”

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