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Minnesota faces major challenges in meeting the federal health care law's requirements for open enrollment this fall, the new general contractor for the state's online insurance marketplace told the MNsure board of directors on Wednesday.


In a report to MNsure's board, representatives from Deloitte Consulting said even if the troubled system makes improvements it is unclear if it will be ready in time for the next open enrollment period, which begins Nov. 15.

Also: Minnesota's uninsured rate drops 41 percent


The report found that MNsure could not reliably perform nearly two-thirds, or 47 of 73, necessary functions, as they do not work properly or are non-existent. About six of those functions could wait until after the next open enrollment but Deloitte Consulting representatives say MNsure must make 41 of those tasks work for the fall open enrollment period -- either through changes or workarounds.


Those deficiencies can result in a variety of errors, including mistakes in how the system determines the kinds of coverage Minnesotans are eligible for and payment accuracy in the Medical Assistance program. They can cause duplicate cases and keep some applicants from receiving health care coverage.


"I wish we could sit here and tell you today 'it's all on track, it's all going to be delivered systematically by November 15th," said Brian Keane, strategy and operations leader in Deloitte Consulting's health plan practice. "However, from experience, I think it would be poor of us to start planning that all of this will be delivered systematically...there will be heavy reliance on manual intervention for this November's open enrollment."


The report laid out a litany of current problems MNsure needs to prioritize. They include making sure MNsure can update its files to reflect when a consumer's life changes, which affects their eligibility for government programs and premium tax credits. Such life events include the birth of a child, loss of a job, divorce or a move.


The other main problem is that MNsure is unable to perform renewals for people in commercial coverage as well as government-sponsored health programs such as Medical Assistance and MinnesotaCare. That will add a critical new function to MNsure that will put more demands on an already struggling system.


MNsure CEO Scott Leitz said the agency's staff understand the work ahead.


"I don't think anyone is kidding themselves, Leitz said. "There's some challenges ahead to make sure that we're ready for fall open enrollment but we're going to continue to work closely with Deloitte...so the site is easier to work with, more efficient, and more effective for consumers the second time around."


Although MNsure has been under new management since late December, Deloitte found that despite improvements, "program governance and process effectiveness remains diluted...which is impeding MNsure's progress and adding risk." 


During the public comment period to the board, one citizen gave voice to problems that consumers face in obtaining coverage through MNsure. Larry Struck of Minneapolis said that although MNsure's purpose was laudable and there's a "huge amount of good here" its expectations haven't matched reality.  He said his fiance, who needs health coverage has received wrong information, endured interminable holds on the phone, and that those actions have important consequences for the people who need health insurance.


"It makes me wonder are you are the right people in this position? Struck asked.  "Is this the best Minnesota can do to deliver the promises of this program to the people of Minnesota?"


MNsure hired Deloitte in April at a cost of nearly $5 million to advise leaders on how the site could operate better short-term, as well as how to move forward in the years to come. One of Deloitte's first tasks was to look into what the companies hired to build the website promised -- and what they delivered ultimately. Two years ago, MNsure negotiated with Deloitte to serve as its general contractor but those talks fell apart after Deloitte came in $20 million over what the state decided to spend.


Despite MNsure's challenges, it did manage to enroll more than 240,000 Minnesotans. But according to Deloitte, that was achieved "by supplementing the MNsure system with significant manual workarounds."


Leitz said Deloitte's analysis will help MNsure lower the percentage of uninsured in Minnesota from its current 4.9 percent, "a record low."


Consultant Joel Ario, who formerly headed the U.S. Department of Health and Human Services' Office of Health Insurance Exchanges during the Obama administration, is not worried. He said Minnesota and other state exchanges will work eventually as planned.


"I'm as confident of this as I would be that when the first cars didn't work well, it wasn't time to return to horses and buggies; it was time to improve the cars," Ario said. "This is the new technology; there are kinks to it and it's going to take some time to work them out."

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There are dozens of gaps in the system and MNsure cannot reliably perform nearly two-thirds of the tasks needed for a "robust health insurance exchange," Deloitte Consulting said in its report released Wednesday.

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