EDITORIAL: If Nevada exchange can’t be fixed, get rid of it

Back in November, Nevada Gov. Brian Sandoval was confident the state had made the right decision in creating its own health insurance exchange, giving it more control over implementation of the Affordable Care Act. Given the well-documented nightmare that is the federal exchange at healthcare.gov, Gov. Sandoval indeed may have been right, regardless of Obamacare’s larger failures and how much worse the law’s implementation is going to get.

But Nevada clearly hired the wrong company to do the job. Xerox has badly bungled Nevada Health Link, leaving thousands of Nevadans in health insurance limbo. As reported Friday by the Review-Journal’s Jennifer Robison, 10,520 of the 33,053 consumers who have chosen a plan are on Nevada Health Link’s “pends” list. The list is a roster of people who have attempted to buy an insurance plan through nevadahealthlink.com but who still have no insurer weeks or even months later. And the state can’t identify all of them. A letter from the Nevada Health CO-OP says the pends list is “so inaccurate, incomplete and unworkable that it has become an enrollment graveyard.”

The primary cause of that massive problem, Ms. Robison noted, is the Nevada exchange’s use of premium aggregation, in which the exchange and Xerox collect payments and forward them to insurers. Nevada is the only state exchange that follows this practice; in every other state and on the federal exchange, consumers choose a plan, and their information is forwarded to insurers, who directly bill new members.

This backlog of botched and abandoned enrollments certainly wouldn’t be so large if these customers dealt directly with insurers instead of the exchange, as we editorialized just a week ago in noting the incredible case of Larry Basich. He enrolled last year and has paid his premiums, yet he has more than $400,000 in unpaid emergency heart surgery bills, and no insurer is stepping up to pay those claims. Some consumers on the pends list have paid thousands of dollars in premiums to get health insurance, money that is now just floating around in the ether, and they have no idea whether they’re actually insured.

It’s a travesty that Xerox landed a $72 million contract from federal taxpayers to build a lousy website. The company’s performance was so bad that, as reported by the Review-Journal’s Sean Whaley last week, a state panel approved a $1.5 million contract with Deloitte Consulting, which will have five weeks to identify the exchange’s operational problems and come up with a plan to fix them by the fall, when the next enrollment period begins.

But what about questioning the logic of the payment process in the first place? Where was the oversight from the governor’s administration and other state officials? When every other exchange is running its payment process in the same uniform fashion, did anyone involved with Nevada Health Link say, “Hey, maybe we’re overreaching, making this more complicated than it should be?” The decision to have the exchange collect payments was a colossal mistake. Any costs associated with making the website work — including the aforementioned $1.5 million pact with Deloitte — should be on Xerox.

That’s assuming, of course, that the website can be made workable. This exchange has performed so badly that the state must start working on Plan B. If Nevada Health Link can’t be fixed by the fall, ahead of the Nov. 15 start of the next open enrollment session, then the exchange must be shut down.