Smart, rational decisions regarding the Affordable Care Act have been few and far between, particularly with regard to federal and state health insurance exchanges. But one such decision finally was made Tuesday.
As reported by the Review-Journal’s Jennifer Robison, the Silver State Health Insurance Exchange board voted unanimously to dump Xerox, the vendor contracted in 2012 to build the Nevada Health Link website. The firing was well-deserved. Under the guidance of Xerox, the exchange was plagued by technical flaws, input glitches and errors while holding back sign-ups to about a third of the first-year target of 118,000.
In place of Xerox, the exchange will adopt the federal exchange’s eligibility and enrollment functions for the sign-up period that begins Nov. 15. However, the Silver State Health Insurance Exchange is also issuing a request for proposals for a replacement system. A new platform could come from a state with a functional marketplace, or from a vendor with a similar, proven program.
This is not a good decision.
Xerox was awarded a state contract worth $72 million, of which it has been paid $12.3 million. The company is expected to receive less than $15 million total because it will stay on through November. That money comes from $84 million in federal grants Nevada received to build its exchange. But an analysis of the exchange’s woes by Deloitte Consulting noted that any transition might require more federal grant money — more taxpayer money — on top of that $84 million.
The state and the exchange board should learn from the Xerox debacle and not waste any more federal money trying to build another exchange. Too often at state and local levels of government, officials see federal money as “free” money. The board needs to have more respect for federal taxpayers.