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December 16, 2018

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State OKs contract to move off federal health insurance exchange platform

Obamacare

Alex Brandon / AP

In this May 18, 2017, file photo, the Healthcare.gov website is seen on a laptop computer, in Washington.

Nevada is looking to save more than $18 million by transitioning the state’s health insurance exchange from healthcare.gov to its own platform under a newly approved contract.

The Board of Examiners, headed by Gov. Brian Sandoval, approved contracts today that included a $24.4 million, five-year deal with GetInsured for the platform and a call center. The move will save the exchange $18.9 million through 2023 as costs rise to use healthcare.gov, said Heather Korbulic, executive director of the Silver State Health Insurance Exchange.

GetInsured helped Idaho transition off of healthcare.gov and onto its own platform in 2015, the only state in the country so far to do so, Korbulic said.

After Xerox fumbled Nevada’s first attempt at a state-run platform, forcing the state onto healthcare.gov, the exchange requested proposals from companies with demonstrated experience in successful healthcare platforms.

“The Xerox ghost lives in my office,” Korbulic told the board. “Yes, I am well aware of the pain that was created in 2014, and I am very confident in GetInsured’s ability, not just based on what they’ve done in Idaho, but they’re operationalized in six states with a proven platform that is functional and working for them.”

Fees rising from $5.5 million to a projected $13.2 million by 2020 will reduce operating revenue at the exchange to unsustainable levels, Korbulic told the board. The exchange is self-funded through a 3.15 percent assessment on gross monthly premiums collected by carriers.

The Centers for Medicare and Medicaid Services started charging 1.5 percent of those gross premiums for use of healthcare.gov in 2017, a rate that Korbulic said is essentially half of the exchange’s budget. That will go up to 2 percent for plan year 2018 and then 3 percent for the following plan year, taking up nearly all of the exchange’s budget, Korbulic told the board.

“These increased fees are going to reduce our operating budget to .15 percent, or a little over $600,000, and will not allow the exchange to remain solvent,” she said.

Korbulic said the exchange will run down its reserves as it pays GetInsured for the new platform and healthcare.gov at the same time. The exchange is aiming to have its platform fully implemented by October 2019 for open enrollment as consumers purchase plans that start the next year, Korbulic said.

“We’ve been building up a reserve not knowing whether or not we were going to be able to transition away and recognizing that we were going to have a significant cost and price increase with healthcare.gov,” Korbulic said after the meeting. “Now that we have a solid understanding of where we’re headed, we still are going to be spending down our reserve, getting us through this transition.”

The government is charging Nevada for a full final year in 2019, even though the exchange will be on its own platform by open enrollment, Korbulic said, noting that she’s written letters and had Nevada’s federal delegation try to weigh in and reverse the decision. She said CMS has denied the request for Nevada only to be charged for the period they use the federal platform.

“I’m looking forward to any support we can get,” Korbulic said. “We’re not going to be using their system as heavily, and they’re charging us even more, so it seems inequitable to me.”

Sandoval, who said he “still has scars” from the Xerox deal and was the first Republican governor to expand Medicaid under Obamacare, said his office would look into get the government to reconsider charging Nevada for the full year.

“That’s a fact I didn’t know, so I would love to get involved with that in terms of charging us for a full year when we’re only getting a fraction of the service,” Sandoval told the board.

He said after the meeting that he “would hope that I could reach out to the administration.”

The GOP tax law’s elimination of the individual mandate — a tax penalty for certain people without insurance intended to encourage healthy people to buy plans, which helps stabilize the marketplace — is expected to raise average premiums about 10 percent almost annually for a decade, according to a November 2017 Congressional Budget Office report.

Sandoval will be leaving office as the exchange makes the transition to a new platform and said he has confidence in Korbulic and her office.

He said the exchange is well-run, keeping premiums from increasing in Nevada as much as they have in some other states. He said it’s in the best interest of consumers to swap platforms if the exchange can do the same job as healthcare.gov for up to half the cost.

“We have a proven vendor that has been successful in many states,” Sandoval said. “This is something we have to do, because if we were to stay as a hybrid and be on the federal hub, it would sink us.”

Korbulic said a state-run platform will not only save the state money but help protect Nevada from much of the uncertainty in the market as federal health care policies remain in flux. She has said moving away from healthcare.gov would give the exchange more data to understand demographics that are being reached and those that need more targeted resources.

The new platform may also bring consumers lower premiums should the Nevada marketplace continue to stabilize, Korbulic said.

“We believe that could lower our premium assessment fees and then that would be passed along to the carriers, who then therefore pass it to the consumers,” Korbulic said.

The contract is not to exceed $24.4 million over five years, including $1 million for design, development and implementation, Korublic said.

Korbulic said after the meeting that with the contract’s approval, a project management team will start work Aug. 15.

Officials will set out roles and start developing a plan in an Aug. 27 meeting with the Division of Welfare and Supportive Services, exchange staff and project management teams with the exchange, as well as GetInsured, Korbulic said. GetInsured has until November to present a full plan that needs approval to begin work, she said.

“There is a lot of hard work ahead, but we’re happy about where we are,” she said.