Minnesota Auditor: MNsure’s ‘Failures Outweighed its Achievements’

A lack of adequate testing before the Minnesota’s health insurance exchange launched in 2013 and other issues meant the exchange’s “failures outweighed its achievements” in its first year, the legislative auditor concluded in a report released on Feb. 17.

The long-awaited, comprehensive look at MNsure’s development and implementation comes as the exchange wraps up its second round of open enrollment — a year MNsure officials say was a marked improvement. Still, its findings could fuel several competing proposals in the Legislature to shake up oversight and give additional ammunition to Minnesota Republicans who have called for larger changes to the ailing exchange.

The nonpartisan Office of the Legislative Auditor found that MNsure staff didn’t adequately test its website and didn’t share “red flags” about looming technological issues with board members. Those lapses, among others, worsened a rocky rollout that saw the exchange’s website crash several times and frustrated consumers, the audit said.

And those technological woes compounded as MNsure customer service staff were enlisted to manually process applications stuck in online limbo. Already working with a small call center staff, wait times spiked as high as 60 minutes and more than a third of customers with questions hung up before getting an answer, according to the report.

MNsure CEO Scott Leitz defended the exchange in a formal response. He agreed the site should have been more thoroughly tested but said many of the issues in the audit have been corrected.

Gov. Mark Dayton, who has consistently defended the exchange, agreed.

“It’s gotten a lot better,” Dayton said. “The report stops before those improvements can be identified. It’s pretty much a one-sided view of the problems.”

Leitz said communication between MNsure staff and the exchange’s governing board has improved since he took over for former CEO April Todd-Malmlov, who resigned amid controversy in December 2013.

The legislative auditor sought Todd-Malmlov’s input, eventually sending her a subpoena. But her attorney declined to participate in the audit unless the office covered all costs, including her attorney’s fees.

For all its problems, MNsure officials and Democrats who pushed the state to set up an exchange say MNsure has been a success. They cite the 370,000-plus enrolled in its first year and the reduction in the state’s uninsured rate to 5 percent.

The legislative auditor said it was unclear how large a role MNsure played in that reduction, noting that just 28 percent of enrollees in the exchange’s first year were previously uninsured. The audit also notes MNsure is falling far short of initial hopes of enrolling more than 1 million residents for insurance by 2016 in either public health programs or private plans, and said MNsure only met its scaled-back projections due to an “unrealistically low” estimate of how many residents would enroll in Medical Assistance.

Republicans seized on the audit as the latest in a series of issues at MNsure. Previous audits found that the exchange had mishandled $925,000 in marketing work and mistakenly enrolled several Minnesota residents in public health programs when they didn’t qualify, among other problems.

“The Legislative Auditor’s report confirms what we have known to be true; MNsure is still failing to meet the promises of its Democrat architects,” Rep. Greg Davids, R-Preston, said in a statement.

One of those Democratic architects, Sen. Tony Lourey, may get a boost from the auditor’s report. Lourey is behind a bill that would abolish MNsure’s seven-member governing board, instead establishing MNsure as a full-blown state agency that reports directly to the governor – a move that the audit backs.

“In our view, an agency with the importance and visibility of MNsure should be directly accountable to the governor,” the report concludes.