Another State Exchange Is Dropped Into The Trash Bin

Nevada Scraps Do-Over For Failed State Healthcare Exchange

September 15, 2014 by Ben Bullard 

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Nevada abandoned its contract with a company to run its failed state Obamacare exchange back in May, waving goodbye to $75 million in wasted contract money in the process. The plan was to shift everyone buying Obamacare coverage over to Healthcare.gov, take a breath and recommit to crafting a new state exchange that could deploy in time for next year’s open enrollment period.

Instead, Nevada’s Silver State Health Insurance Exchange board voted to stop looking for a new vendor to build a new state exchange, and just use the Healthcare.gov exchange permanently. Insurance customers in Nevada will still access the Healthcare.gov enrollment backbone by visiting the state’s Nevada Health Link site, but underpinning it will be the same software and database system employed by the federal Obamacare exchange.

That’s a calculated gamble, since Healthcare.gov isn’t secure. But for the state exchange board, it has become a case of refusing to throw good money after bad.

From the Las Vegas Review-Journal last week:

Shawna DeRousse, chief operating officer of the exchange, said Nevada Health Link enrollments had dwindled to 34,000, down from 38,000 earlier this summer, and sign-ups may drop more as customers face re-enrollment in November. If member counts drop, the state may not be able to support a third switch. Moving onto the federal website will cost an additional $25 million for the state Division of Health and Human Services, which runs Nevada Medicaid. The state’s General Fund must match $3 million of that.

Said the exchange report: “If the next open enrollment is not successful, there is no guarantee that implementing a third system within three years would produce a successful result. Additionally, if the current federal infrastructure fails, it fails nationally, and federal resources will be utilized to fix the system. No additional state funding would be required to remain on the system, given current legislative status.”

There’s nothing like pinning your hopes on an inevitable loser, only to enjoy the benefit of having someone else take the blame for the mess.

Nevada residents filed a class action suit against Nevada Health Link in April, claiming they were paying for coverage they weren’t receiving, thanks to the site’s inability to correctly process and track enrollments.

As the nationwide 2015 enrollment period inches closer, expect a revival of the daily Obamacare horror stories that dominated the news late last year.

“It’s been pretty quiet lately on the Obamcare front… So quiet, that there has been a flurry of articles recently over how Obamacare has dropped to a second or even third tier issue and will hardly matter come election-time,” health policy researcher Bob Laszewski blogged last week. “The last couple of months have been very quiet for Obamacare… That is about to end.”