Over the years, thoughts and questions about MNsure have become the focus of dozens of legislative committees. The state insurance exchange touches on topics of commerce, health care, taxing and state government operation, putting it within the purview of many different panels.
As of Thursday, another committee wants answers. There’s just one difference: This one is in Washington, D.C., and is run by members of the U.S. Congress.
In a letter addressed to Allison O’Toole, interim CEO of MNsure, GOP U.S. Rep. Joseph Pitts (R-Pennsylvania), outlined a litany of concerns relating, broadly, to how state insurance exchanges used federal grant funds to establish their marketplaces. More specifically, Minnesota is being asked to account for its past communications with federal agencies regarding progress, and how or if it plans to spend the remaining $107 million in federal funds it has on hand.
That letter, one of 17 such requests issued by Republican Congressional leaders Thursday, was a late-breaking item for a Thursday hearing of the MNsure Legislative Oversight Committee. But after the hearing, Rep. Greg Davids, R-Preston, Republican lead on the oversight panel, zeroed in on the federal request with a pointed statement urging Gov. Mark Dayton and MNsure to comply with the federal investigation.
“Minnesota Republicans have long expressed skepticism about how MNsure has handled the $180 million wasted so far on the broken website,” Davids said.
Perhaps because new of federal interest only arrived on Thursday, the topic barely found its way into the oversight hearing. To be fair, there was already plenty to discuss.
First, and biggest on the agenda was fallout from the news that premium rates are set to rise for many consumers inside and outside the exchange next year. Monthly costs on a majority of plans will increase by more than a third, and some rates will nearly double.
Explaining the insurance companies’ point of view, Kathryn Kmit, lobbyist for the Minnesota Council of Health Plans, said insurers had “done everything they can to absorb the costs, and headaches” imposed by the first few years of MNsure. Kmit pitched the rate hikes as a natural adjustment to the MNsure market, which had attracted more people in need of regular, high-cost health care than previously expected.
“We’re seeing … premiums that, for the first time, are based on the cost of actual expenses,” Kmit said.
On several occasions Thursday, lawmakers of different chambers and parties came back to a recent statement made by Commerce Commissioner Mike Rothman, who said the new rates were “unacceptably high.”
Rep. Joe Hoppe, R-Chaska, chair of the House Commerce and Regulatory Reform Committee, asked several testifiers, including Kmit, if MNsure might be a contributing factor to the rising cost of insurance. If health plans are being forced to hire additional employees to handle more consumers, as mandated by MNsure, Hoppe reasoned, those new staffers might be paid for through higher premiums.
Hoppe’s line of questioning received varying degrees of doubt; most certain was Peter Brickwedde, representing the Commerce Department.
“The answer is zero,” Brickwedde said. “That was not a factor baked into the rate requests made by the companies.”
Instead, Brickwedde and others, including Kmit, said rising rates are most directly affected by increasing health care costs across the market. Sen. Kathy Sheran, DFL-Mankato, said she does not like the rate increases either, but wanted to “separate” conversation about higher premiums from the debate over MNsure’s success or failure.
“It complicates this discussion, which is about the cost of health care, and its inflating cost,” Sheran said. She added: “It’s not MNsure that is driving the cost of health care, but a number of other factors.”
Representing MNsure at the hearing, O’Toole said federal subsidies available through the exchange had saved consumers $31 million last year, and said that number should grow in the future. Higher premium prices next year would ultimately result in consumers being pushed into different eligibility brackets, whereas some had previously not been able to receive any subsidies.
O’Toole said the exchange could not estimate how many Minnesotans would actually see lower out-of-pocket costs next year, though David suggested “a whole lot of them are going to be paying a whole lot more.” Sen. Tony Lourey, DFL-Kerrick, the DFL Senate leader on the oversight committee, challenged Davids’ assumption. Consumers could be on the hook for more premium expenses if they stick with a plan that is no longer available on the exchange, or if they continue to purchase insurance outside of MNsure.
But many who use the exchange system to shop for new insurance would be expected to receive greater federal aid toward paying their premiums.
“Many, many, many of them, with the new benchmarks after the rates were released, will be subsidy-eligible that weren’t in previous years, and could gain significant tax advantage,” Lourey said.
Davids acknowledged what he called a “good point,” but was less sure than Lourey and O’Toole, saying the committee co-chairs would have to “see how that goes.”
On another topic, Rep. Tara Mack, R-Apple Valley, pressed both the Department of Human Services (DHS) and the Department of Commerce to begin work on crafting a federal waiver to allow for “innovation,” an element of the Affordable Care Act which allows states to design their own insurance market programs. Brickwedde told Mack that the course on such waivers is still unclear. Hawaii has made the most progress of any state, he testified, and that state only begin taking serious steps after a year of task force meetings on the topic.
“The state is operating blind, in terms of how to design a waiver,” Brickwedde said. “[Federal] regulations are opaque, to put it kindly, I think.”
Mack, chair of the House Health and Human Services Reform Committee, urged exchange figures to continue work toward a waiver. She said she would hope options for consideration could be available within the “next couple months,” or by year’s end, so the Legislature could debate different options when it convenes next March.
“I know it was commented on that, there’s not really a model out there to follow,” Mack said. “I’m confident folks in [DHS] could put something out there that would serve Minnesotans well, and give them the best product available.”