Advocates for poor say MNsure's 2-tier enrollment system is unfair

The state's new online health insurance marketplace, MNsure, is banking on community groups and other grass-roots organizations to help people sign up for health plans.

MNsure will pay consumer assistants to help Minnesotans apply for and enroll in coverage. But MNsure has a two-tier payment system that advocates for low-income people call unfair.

MNsure is one of the new state-based marketplaces that are a cornerstone of the federal health care law. Because they are new, and tens of millions of Americans will use them to enroll in health insurance for the first time, the federal health care law requires states to help consumers understand and sign up for coverage.

MNsure will pay these consumer assistance partners $70 for each person enrolled in a commercial health plan. But for people whose income is so low that they cannot afford to pay for health insurance and must rely on Medicaid, the federally sponsored program for the poor, MNsure will pay just $25.

That difference is prompting complaints that MNsure is treating lower-income Medicaid enrollees like second-class citizens. Doing so is unfair to the organizations that help them and the potential Medicaid enrollees, said Sarah Greenfield, Health Care program manager of TakeAction MN, a coalition of unions and other advocacy organizations.

"We're seeing really a caste system of compensation where folks who are doing outreach and enrolling people in our public programs are getting less than half of the compensation that organizations will get for enrolling people in private coverage," Greenfield said.

Representatives of nonprofit groups that already do such work say $25 is a fraction of what it costs them to enroll a person in a government program. Those who qualify for Medicaid coverage are often the hardest to reach and require numerous contacts, said Deb Holmgren, president of Portico Healthnet, one of the programs.

Low-income applicants for health care typically work several part-time jobs. Those who lack stable housing move frequently. Some have difficulty navigating the health care system because they do not speak English well.

It typically costs a program between $250 and $300 to successfully enroll qualified people in Medicaid, Holmgren said.

The one-on-one phone and in-person assistance will be essential to enroll many people successfully, Holmgren said. But the scale of that effort, she said, is underappreciated and underfunded.

"It's easy to say we'll put millions of dollars into systems that will make us efficient," Holmgren said. "But when we say, 'OK, in addition, we need millions of dollars to put into outreach and enrollment assistance in order to get these really difficult to reach populations,' that's seen as a luxury."

A primary goal of the federal health care law is to provide health insurance to as many people as possible, either through government programs or private insurance. That could reduce costs because the uninsured, particularly those with chronic illnesses, often wait until they are so sick they require the most expensive care in hospitals. The cost of their uncompensated care is passed on to those who do have coverage.

The Obama administration contends that if the uninsured are covered, they receive treatment earlier and prevent costly in-patient hospital stays. One recent Wisconsin study appears to bear that out.

MNsure officials say the differing compensation for helpers does not mean that the state values Medicaid enrollees less than people who can afford private coverage. Rather, they say, the situation is the result of stopgap measures cobbled together to meet federal mandates.

Congress required states to hire so-called navigators to help people use the insurance marketplaces. But the 2010 health law didn't provide a dime to pay for the program. And for the two years that GOP lawmakers controlled Minnesota's Legislature, they refused to allocate any funding.

Last fall, time was running out to find a solution. Minnesota was facing a deadline to tell federal officials how the state would deliver navigator services.

"We were in a bind," state Human Services Commissioner Lucinda Jesson explained to the MNsure board last week. "So it was, 'What can we use to provide this service in order to get an exchange up and running that's already being funded?'"

To satisfy the federal requirement to use navigators, state officials turned to an existing program, Minnesota Community Application Agents, which already had state funding and had been helping people enroll in government health plans for years.

The pay per enrollment through MNCAA is set in statute -- $25 a head, said its executive director, April Todd Malmlov.

As MNsure was setting up this work-around, federal officials moved to address the lack of federal funding for state assistance programs. A year ago, the federal Center for Consumer Information and Insurance Oversight, which is part of the centers for Medicare and Medicaid, revealed with little fanfare a new companion program called in-person assisters. It allows states to use federal grant money to pay these helpers as long as they see clients in person.

Minnesota is seeking $7 million to pay the assisters. MNsure can set the reimbursement rate and has announced assisters will be paid $70 per head to enroll people in commercial health plans. Jesson said MNsure won't stick with two uneven systems forever.

"There is absolutely no question that we need to move to one streamlined approach, and we're really working on it," she said.

The per-person compensation for enrolling individuals in MinnesotaCare is still undecided. MinnesotaCare will provide state-subsidized health coverage for people who earn too much to qualify for Medicaid but still cannot afford the full cost of commercial insurance plans sold on MNsure.

About two weeks ago, the state announced that there would be an additional $4 million in federal money available that organizations could apply for to hire staff or buy equipment to reach out to the uninsured. The money would be used for groups that enroll Minnesotans in any coverage from Medicaid to commercial plans, but the grants are geared toward hard-to-reach populations, low-income people who are uninsured.

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