Estimate for lost MinnesotaCare premiums tops $44 million

The estimate for lost premium revenue due to troubles with MinnesotaCare invoices is now up 60 percent to more than $44 million, state officials said Tuesday.

A year ago, the state projected a revenue shortfall of about $27 million because of problems using the MNsure system to send invoices to those covered by the public health insurance program.

The estimate has grown because problems with the system have persisted, and the state has better information for making projections, Chuck Johnson, deputy commissioner for the state Department of Human Services, said in an interview.

MinnesotaCare provides coverage to about 110,000 people with incomes slightly above the poverty line — a group that's often described as the "working poor."

Enrollees pay premiums of anywhere from $0 to $80 per month depending on income. Premiums account for less than 10 percent of overall program costs, with most money coming from the federal government and the state's Health Care Access Fund.

"We have the appropriations to run the program," the Department of Human Services (DHS) said Tuesday in a statement. "However, we are certainly concerned about the issues with the billing system and the significant loss of revenue to the state."

State officials have known about the problems using MNsure for MinnesotaCare invoices for more than a year. This past summer, they made the decision to stop trying to fix MNsure for invoices, and opted instead to revert to the state's old system.

The old computer system has needed about $850,000 worth of updates, and the billing switch is scheduled for next month.

The collection problem shouldn't cause any problems for patient access to care, or payments to health care providers, said Sen. Tony Lourey, DFL-Kerrick. Overall, the latest budget numbers show the program is in good shape, Lourey said.

"The collections have, historically, been well done in the program," he said. "We'll get back to that soon."

The estimates for lost premium revenue come in the context of the state's budget forecast, which is updated twice a year.

The forecast issued a year ago lowered the estimate for MinnesotaCare premium revenue by $6 million during the two-year period that ended June 30. It also projected that during the two-year period that started July 1, collections would be down $21.3 million.

Last week, the state updated the budget forecast, with officials now saying premium revenue in the earlier period was down an additional $4.5 million. Estimated premium revenue for the current two-year period is being reduced by additional $13.3 million.

Minnesota launched the MNsure health insurance exchange to implement the federal Affordable Care Act, and part of the project modernized the IT system for the state's MinnesotaCare and Medical Assistance programs.

The state's problem sending premium notices is frustrating to many MinnesotaCare enrollees who want to pay, but aren't getting their bills, said Rep. Matt Dean, R-Dellwood.

It's also frustrating, Dean said, to people with individual health insurance policies who are facing big premium jumps for coverage starting next year.

"People out there who are paying, in many cases, more than $1,000 a month in premium and deductibles … look at this and they can't believe it," he said.

Early next year, the state intends to start a reconciliation process to collect unpaid premiums from MinnesotaCare enrollees.

In July, DHS said there were about 55,000 cases of MinnesotaCare enrollees who had not been getting bills. The figure was down to about 10,000 cases as of September.

The department plans on creating payment plans for enrollees, so people won't be asked to pay all at once.

"We would not make past or future eligibility contingent on making those payments," Johnson said.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck