Legislative auditor rips MNsure leaders for troubled launch

Updated 5 p.m. | Posted 11:09 a.m.

Minnesota Legislative Auditor Jim Nobles on Tuesday ripped MNsure and its leadership for bungling the launch of the health insurance exchange.

Widespread problems with MNsure's online enrollment system and customer service caused big problems for consumers, insurers, counties and the Department of Human Services, the auditor's report said.

"MNsure did not deliver what was promised," Nobles told a legislative hearing Tuesday afternoon. "MNsure performed poorly."

Nobles' office recommended lawmakers revamp the MNsure structure to give the governor, rather than the MNsure board, power to hire MNsure's CEO. It also said the Legislature should consider making the board purely advisory

The audit also said any future technology work ordered by MNsure should be overseen by the state information technology services office.

Gov. Mark Dayton said he hadn't read the entire MNsure audit but emphasized that the review was done during its troubled first year and that it's improved since then.

Still, the governor said, "the buck stops with me" when it comes to MNsure's accountability.

The auditor's report found a few bright spots. It said that people who did get insurance are actually pretty happy with it. And in some cases, the report points out that things are better than they were a year and a half ago.

MNsure officials also point out the site's operations have improved and they strongly disagree that the agency's failures outweigh its achievements.

Still, GOP lawmakers jumped on the audit as evidence MNsure needs to be overhauled.

House Rep. Matt Dean, R-Dellwood, called MNsure a failed system in design and implementation.

The auditor's report confirmed MNsure was doing "more harm than good," he added. "This has made things worse for Minnesotans both inside the program and outside of the program."

The auditor was tapped to review the program after MNsure stumbled out of the gate in 2013. MNsure was controversial and expensive from the start, spending nearly $190 million in federal grants to launch.

The website was launched with some big problems and without some critical testing.

In September 2013, just weeks before launch, tests showed that the MNsure website couldn't handle more than 1,000 clients at a time. The goal had been to serve 10,000 at a time.

In Tuesday's report, the auditor's office noted 75 percent of the people it interviewed who'd successfully enrolled in a health plan through MNsure reported "significant" technical problems with the website.

The auditor noted that before the website's launch, MNsure board members said they were getting a "fairly positive view" from April Todd-Malmlov, MNsure's first CEO, about the system's readiness.

"Board members did not believe they received enough information about system readiness, and some felt misled by MNsure staff leadership," the report said.

Nobles also noted that Todd-Malmlov, who resigned under pressure in December 2013 following the botched launch, was subpoenaed for interview by the auditor's office. However, she said she would only agree to it if she was paid.

"Her attorney said the former director would only cooperate if the Office of the Legislative Auditor paid all expenses she incurred by cooperating, including her attorney's fees," the report said.

In a statement, attorney Marshall Tanick said, "Ms. Todd-Malmlov continually indicated a willingness to meet with the Legislative Auditor, as long as her rights were honored."

Ultimately, she did not testify, Nobles said.

MPR News reporter Tom Scheck contributed to this report.