Cost of MNsure insurance may leave target group no better off

Checkup: Minnesota's uninsured - First in an occasional series

Jamie Ward has run the numbers over and over — even consulting a financial counselor — and still doesn't know if she can afford the health insurance she found on MNsure.

With two months left to enroll for benefits this year, the 29-year-old from East Bethel must decide whether to buy coverage for herself and her husband — or risk staying uninsured and paying a penalty imposed by the new federal health law.

"It might be cheaper to pay a hospital bill if something happens than to pay a premium every month," she said in a recent interview.

Setting aside the problems that have hounded the state's troubled health insurance website, the key measure of MNsure — and the federal health law it embodies — is whether it successfully extends health benefits to Minnesota's estimated 490,000 uninsured — people such as the Wards.

Trouble is, nobody knows the answer.

Four months after MNsure launched, with more than 90,000 Minnesotans having used it to buy insurance, officials still don't know how many of those people were previously uninsured and how many simply used it to upgrade their coverage. Every enrollee was asked whether he or she had prior insurance, but the complexities of the website prevent exchange officials from tallying the results.

It's a pressing national question as well. State exchanges in Connecticut, Kentucky, Colorado and Washington couldn't provide the number, and federal officials have provided no such breakout.

Covering the uninsured was a priority for President Obama when he signed the 2010 Affordable Care Act, which created the exchanges and has been described as the signature achievement of his presidency.

"The primary purpose was to address the lack of coverage" for the uninsured, said Gary Claxton, who tracks the insurance exchanges for the Kaiser Family Foundation. "So it will be judged by that."

So far, the best insight comes from a small report by the McKinsey consulting firm. A national survey of 4,563 people in late 2013 found 389 who had purchased new health benefits on the individual market. Only 41 of them — 11 percent — had been uninsured.

Researchers from McKinsey's Center for U.S. Health System Reform also found that 70 percent of respondents who intended to buy coverage individually — but had yet to do so — were uninsured. Most said they delayed enrollment, whether they were buying plans on state or federal exchanges or the open market, because they found the premiums too high.

Of course, the Affordable Care Act created other ways to cover the uninsured. One provision allowed states to greatly expand public coverage for low-income recipients; Minnesota took advantage of that portion, and its Medical Assistance program grew from a monthly average of 583,000 recipients in 2009 to 733,000 in 2012. Federal health reform also extended the age by which adult children could stay on their parents' plans.

Normal turnover in Minnesota's insured and uninsured populations also makes it hard to measure the law's impact on coverage. From year to year, many people with benefits lose them, and many uninsured people scrape up the money to buy coverage. So the coverage options on MNsure might have allowed some previously insured people to stay insured.

Altogether, the Congressional Budget Office estimated last May that the law would cut the number of uninsured Americans by 14 million this year — or about one-third of the nation's uninsured population; an update issued Feb. 4 reduced that estimate to 13 million people, mainly because of technical problems in the law's rollout last year.

For Jamie Ward, the idea of remaining uninsured is tempting because her two preschoolers are covered by Medical Assistance, which has more generous eligibility standards for children than for adults.

"Really, they're the ones that I worry most about falling and scraping something or breaking something," she said.

MNsure's website gave the Wards hope, telling them they qualified for a tax subsidy to reduce the cost of premiums for plans they could purchase on the exchange. Later they learned that was incorrect.

Families generally qualify for subsidies when premiums eat up more than 9.5 percent of their household income; the Wards' income put them just above that threshold.

"We would be in the red every month," Jamie Ward said. "We don't live a very luxurious lifestyle. We're not going out to eat all the time, not going to movies all the time. But we'd have to make some cutbacks to make it work."

Some analysts believe that incentives in the federal law aren't strong enough this year to persuade the uninsured. The "stick" that enforces the mandate to have health insurance is a penalty that, in the first year, caps at $285 per family or 1 percent of household income (whichever number is higher).

"The monetary value isn't a big enough stick to change somebody's purchasing pattern" in 2014, said Geoff Bartsh, vice president of state public programs for Medica, the Minnetonka-based insurer with plans for sale on MNsure. But he added: "To the extent that people just generally like to follow the rules, I think the mandate will be somewhat impactful."

Health Access MN, on the other hand, has conducted MNsure outreach events at public libraries and homeless shelters and has almost exclusively worked with uninsured people to get them enrolled.

"We get a number of people who are coming in purely because of the mandate, and they're realizing they are eligible for a public program and that it will be much more affordable than they had anticipated," said John Freeman, lead navigator for the agency.

The Wards, however, discovered that insurance would cost more than they anticipated, $347 a month. They could drop their cable television service but, they say, that would just be the start of cutbacks to pay for premiums.

Jamie Ward could use health insurance. She has asthma, and has been rationing the inhaler medication that was covered under insurance from her old job.

"It'd make me feel better if I did have insurance," she said.

Jeremy Olson • 612-673-7744