Audit Details ‘Seriously Flawed’ Minnesota Exchange Rollout

Published February 24, 2015

In a detailed report to the Minnesota Legislature, auditors say the state’s health insurance exchange, known as MNsure, was riddled with mistakes and failures during its rollout.

A “seriously flawed” online enrollment site and customer service woes were part of a program Jim Nobles, the state’s legislative auditor, describes in the report as “well intended” but “not well executed.”

Some of the key problems uncovered by the auditor include keeping information from elected officials and the public, publicly promoting enrollment goals known internally to be inaccurate, and a general lack of accountability.

“The MNsure audit released last week by the nonpartisan Legislative Auditor proved true what many of us have been saying for two years: MNsure’s failures outweighed its achievements,” said Annette Meeks of the Freedom Foundation for Minnesota, a free-market think tank. “Minnesotans were promised lower costs and an easy-to-use website. However, due to the lack of leadership and oversight by the governor and the MNsure board of directors, all of whom were appointed by the governor, we learned that Minnesotans paid a hefty price for the failed promises of this administration.”

Warning Signs Kept Secret

Auditors discovered MNsure officials were aware of early warning signs the site would not be ready to launch on October 1, 2013, but instead of alerting elected officials and the public, the exchange’s leadership remained silent.

The report states, “[A]n independent contractor’s reviews of the exchange raised serious doubts about its readiness. MNsure staff did not share this information with MNsure’s governing board.”

The Minnesota site experienced failures as significant as those of the federal website. The report says 75 percent of those surveyed who used the website experienced “significant technical problems.”

The report also says many customer service representatives at call centers were not properly trained to assist people. Wait times for customers on the phone averaged four hours.

 Legislature’s Oversight ‘an Abject Failure’

State Sen. Sean Neinow (R-Cambridge) says a lack of oversight by the state legislature contributed to the problem.

“The Legislative Oversight Committee was an abject failure,” Nienow said. “It was obvious the oversight committee co-chairs had no interest in exercising oversight. Very few oversight hearings were held, and those that were often were the result of very public problems” such as a publicly revealed data breach that raised privacy concerns.

State Sen. Michele Benson (R- Ham Lake) says there is a lack of accountability for the exchange’s failure.

“Nobody will admit to having hired the first executive director of MNSure, April Todd-Malmlov,” Benson said. “According to Nobles, the only response he ever received was simply that she ’emerged’ as the best candidate to run MNSure.”

Low Goals Intentionally Set

Auditors also revealed the state’s Department of Human Services (DHS) provided an inaccurate benchmark for enrollment success, allowing the exchange to claim it had met its goals instead of admitting it had fallen short.

Minnesota’s DHS initially projected 135,000 people would enroll in private health insurance or public plans such as the state’s Medicaid program, with 70,000 expected to obtain private coverage. Only 47,000 Minnesotans enrolled in private coverage in the first year, but because enrollment in Medicaid soared well beyond initial projections, combined public and private coverage topped 135,000. Exchange officials declared success.

DHS says the initial projection was an error but the goal of 135,000 enrollments in the initial signup period was never revised upward to correct the error.

“MNsure continued to use the original projection as a benchmark for its enrollment success,” Nobles’ report said. “If a more realistic projection of … enrollment had been included in MNsure’s projections … actual total enrollments through MNsure for the first open enrollment period would have fallen far short of the overall projection, since other types of enrollment were low.”

Sean Parnell ([email protected]) is managing editor of Health Care News.