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September 17, 2014

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Will Nevada drop its health care exchange, Xerox on Tuesday?

The Silver State Exchange unveiled a list of options today to repair its online health care enrollment software after a disastrous rollout plagued by technical glitches.

The Silver State Exchange’s board of directors will meet Tuesday to consider six options that fit into three basic scenarios:

• Keep the current system and contractor Xerox

• Switch to another state’s online system

• Join the federal marketplace

The board meeting comes less than a week after state leaders visited the federal Centers for Medicare and Medicaid Services in Washington, D.C. Agency officials worked with Nevada leaders to find fixes the state system and find ways to pay for it, said CJ Bawden, a spokesman for the Silver State Exchange.

The state awarded Xerox a $75 million contract in 2012 to build the online marketplace, Nevada Health Link. When the site launched Oct. 1, it faced serious and immediate problems. People would pay and not receive coverage. Tax credits and other subsidies weren’t processed correctly. Some people overpaid.

As of May 10, Nevada had signed up only 35,000 people. That’s just 30 percent of the 118,000 goal the state had set for March 31.

Xerox has been paid about $12 million for the work it has completed, and Bawden said the company will only be “paid for completed portions of the contract.”

States facing similar problems have been split on the solutions they try. Maryland wants to tap into Connecticut’s health care software. Oregon recently announced it would switch to the federal system, Healthcare.gov.

Bobbette Bond, chief project officer for nonprofit insurance provider Nevada Health CO-OP, said it’s time for Xerox to leave Nevada. “Xerox has done everything it can do and it’s not enough,” she said. “We have strong preference that the state do something other than Xerox.”

But Dwight Mazzone, a Las Vegas insurance broker, said dumping Xerox “would create havoc.”

If the state goes with the federal system and abandons Xerox’s software, Nevada would get federal funds for 90 percent of the move. The state would pay about 10 percent of the estimated $15 million to $20 million switch, according to the board’s report.

If the state keeps Xerox’s software but tie into federal system, the cost would rise to $40 million to $70 million, the report said.

A move to the Connecticut system would cost $67 million.

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