MNsure taps insider to replace departing CEO Scott Leitz

Leadership at the top of MNsure is in flux with word Monday that Chief Executive Scott Leitz is resigning.

Unlike the crisis atmosphere that surrounded Leitz's arrival in December 2013, MNsure is now in a period of relative stability, Leitz told reporters Monday.

He's leaving for a job with a nonprofit group that conducts research on health care cost trends, and will be replaced on an interim basis by Allison O'Toole, MNsure's deputy director for external affairs.

Republicans and DFLers at the State Capitol are set to begin negotiations this week over a health care spending bill that includes dramatically different approaches to changes at MNsure, but Leitz said the uncertainty was not a factor in his decision.

Two members of the seven-person MNsure board see their terms expire Tuesday, with replacements not expected for weeks. Brian Beutner, the MNsure board chairman, said O'Toole and the remaining board members will provide sufficient continuity.

"I don't see any issues," said Beutner, who is one of the directors leaving the board. "It's very natural for a start-up to seek different leadership at different stages of the organization."

Republicans said that Leitz's departure was a sign of continuing problems at MNsure.

"This is the second CEO resignation from MNsure in less than two years," said Sen. Michelle Benson, R-Ham Lake, in a statement. "The amount of turnover in MNsure's leadership is a telltale sign of systemic failure in the organization."

Democrats rejected the idea.

"They must have a little mini-celebration every time something indicates a problem with MNsure," said Gov. Mark Dayton during a news conference. "I think the basic thrust of MNsure is working much, much better."

Minnesota launched the MNsure exchange to implement the federal Affordable Care Act. People use the government-run marketplace to buy non-group coverage from private health insurance companies, or to enroll in the state's public health insurance programs.

MNsure was plagued with a balky website and overwhelmed call center during its rocky rollout in late 2013 and early 2014. Since then, the performance has improved for people using the website, but problems remain with what officials describe as the system's "back end."

County officials still struggle to efficiently use MNsure to manage cases for people with public health insurance. The system still has trouble sending accurate and complete information about enrollees to health insurance companies. And there's a lack of a "portal," which would help insurance agents navigators connect people with coverage.

O'Toole pledged to keep tackling problems.

"My eyes are on the future, and we have our work cut out for us," she said. "The system needs to improve for the people it serves."

Beyond the technology problems, there are questions at the State Capitol about the future of MNsure's governance.

Senate Democrats have called for eliminating MNsure's board of directors and giving the governor more direct authority over the exchange. House Republicans, meanwhile, have proposed scrapping MNsure and jumping to the federal government's health exchange for 2017.

MNsure board member Tom Forsythe said Monday he didn't see how Leitz's departure would change the debate, because "I don't know where the middle ground is between those two positions." As a practical matter, Leitz will continue on the job until May 22 — a few days after the Legislature is scheduled to adjourn.

Dayton has asked the legislature to create a task force that would look at alternatives for MNsure, and other possible changes to state public health insurance programs.

Larry Jacobs, a political scientist at the University of Minnesota, said Leitz's departure is not indicative of problems at MNsure, but creates an opportunity for the governor to make fundamental changes.

Any such moves likely won't come until after the Legislature adjourns, Jacobs said, since it will be a struggle for DFLers and Republicans to agree on a budget in the coming weeks, without tacking the divisive MNsure issue.

"If the governor … would decide to look into or pursue reorganization, perhaps along the lines of what people in the Legislature have been talking about, this would a good time to do it," Jacobs said.

Between mid-November and mid-April — a period that includes MNsure's most recent open enrollment period — nearly 220,000 Minnesotans used MNsure to enroll in public and private health insurance programs.

Leitz was named interim chief executive at MNsure following the resignation of executive director April Todd-Malmlov, and was named permanent CEO in April 2014.

Leitz will take the position of chief transformation officer at a Washington, D.C.-based nonprofit group called the Health Care Cost Institute. It was created in 2011 by some of the nation's largest health insurers, including Minnetonka-based UnitedHealth Group, to work on health care policy and research.

Before coming to MNsure, O'Toole was a director at the Minneapolis-based public affairs firm Himle Rapp and was state director for U.S. Sen. Amy Klobuchar, D-Minn. An attorney by training, O'Toole previously worked for Klobuchar when she was the Hennepin County attorney.

Staff writer Patrick Condon contributed to this report.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck