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MNsure announces strategy to balance its $5 million shortfall

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MNsure anticipates a $5 million shortfall for next year, according to preliminary budget projections. But MPR News reports that leaders of the state's health care exchange expect they will not need additional state funding from the Legislature to close the gap thanks to left over federal funding.

The Star Tribune reported that the shortfall was created by lower-than-expected enrollment in private health plans. MNsure has incurred additional expenses with the hiring of 100 additional call-center operators to assist consumers.

The state's online exchange is required by federal law to become self-sufficient in 2015. MNsure leaders estimate the exchange will take in about $35 million in revenue next year, with a $39.7 million budget. MNsure has $5 million on hand in federal grants, but the federal government has said states cannot use the federal money for 2015 because the federal government wants state insurance marketplaces to be financially self-sustaining next year.

At a MNsure board meeting Wednesday, MNsure Deputy Director Wes Kooistra said he expects that federal officials will allow the state the flexibility to carry over that money in 2015. Those funds were earmarked to build the MNsure system and to staff and operate the agency in its inaugural year.

"We're not asking in this budget for more federal money," he said. "We're just asking for an extended time frame to use the federal money they've already given us."

MNsure leaders say that if they are unable to use the federal funds, they will pursue spending cuts. MNsure has reduced costs through staff reductions of navigators when fewer people used them and a downsize in its marketing campaign. MNsure identified about $18.5 million in savings that can be redirected to customer service and improving the website and IT system.

“They’re not aspirational reductions,” Kooistra told the board. “They’re reductions based on what’s happened so far.”

MNsure could adjust its budget to spend $10 million to fix glitches and its website and plow another $2.5 million to call center improvements.

The board deferred detailed decisions about reallocating funds and other line items until after the end of open enrollment on March 31. MNsure must submit a preliminary 2015 budget to state lawmakers before March 15 and a final budget will be presented in October.

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