State says it will write off $30 million in unpaid MinnesotaCare premiums

State health officials said this week they will abandon efforts to collect a backlog of $30 million in MinnesotaCare premiums left unpaid because a troubled computer system could not send bills to some enrollees.

The Minnesota Department of Human Services, which runs the program, has been wrestling with the issue since 2014. Although the problem has been fixed, the agency said the job of identifying people who had not been billed would cost more than the state likely would collect.

It also would create confusion and stress for past enrollees — who make no more than twice the poverty level — if they were to get a bill from years ago, said Acting Human Services Commissioner Chuck Johnson.

"This relates to a problem that was a long time ago and was the result of our fault, not their fault," Johnson said.

But Republican legislators chastised the agency for giving up the effort, citing the failure as a reason to derail a signature Dayton administration proposal to let residents of all income levels buy health insurance through an expanded MinnesotaCare.

"Before we jump off another cliff let's make sure we get the IT correct," said Rep. Matt Dean, R-Dellwood, chairman of the House Health and Human Services Finance Committee, at a hearing Tuesday night.

When the general public hears "that we are simply unable to collect premiums and we are going to just write it off," Dean added, "it is very frustrating not just for the people on the committee but for the people in the state as well."

The unbilled premiums are a legacy of the same computer system that created many problems for the state's MNsure health insurance market exchange.

In addition to being a portal for people to sign up for private health insurance plans, MNsure is also used by people to enroll in the state's Medical Assistance and MinnesotaCare programs.

That system was unable to properly bill MinnesotaCare enrollees for monthly premiums, which range up to $80 depending on income and family size. After several fixes were unsuccessful, the billing functions were moved to an older computer system used by the state to administer public health insurance programs.

Johnson said the billing problems have disappeared since the switch was made in spring 2016.

"We have seen no significant issues over the course of the last two years that we have been billing," he said.

The computer problems did result in overbilling some enrollees, he conceded. He said anyone concerned that they paid too much can request an audit from Human Services and that refunds would be issued in cases of overpayment.

Although Johnson said the matter is resolved, committee Republicans discussed a bill Tuesday night that would force the department to audit all MinnesotaCare premiums paid or unpaid since 2014. No vote was taken on the bill.

"We are paying taxes into that organization and we expect a high level of fiduciary responsibility," said Rep. Tony Albright, R-Prior Lake, the bill's author.

Glenn Howatt • 612-673-7192