EDITORIAL: Time for Nevada to dump its Obamacare exchange

After eight months, the Silver State Health Insurance Exchange has proved that it can’t process the payments that guarantee coverage for enrollees. But it can ask parents whether a 3-year-old is pregnant.

And yet, as reported Wednesday by the Review-Journal’s Jennifer Robison, the exchange’s board put off a decision on whether to stick with Xerox, the contractor for the Nevada Health Link website; fire the company and adopt another state’s exchange platform; or join the federal exchange.

What’s the holdup? The exchange board retained Deloitte Consulting in March, at a cost of $1.5 million, to evaluate Nevada Health Link and give guidance on how to fix its myriad technical issues, which have held paid enrollments to about a quarter of the targeted goal of 118,000. Deloitte found problems ranging from frequent subcontractor turnover to flawed enrollment questions, such as the aforementioned one about a 3-year-old’s ability to conceive a child. The analysis by Deloitte, which built exchanges in Connecticut, Kentucky, Rhode Island and Washington, included the pros and cons of keeping the system, dumping it and using another state’s exchange, or transitioning to the federal exchange.

The analysis didn’t include a recommendation for a specific exchange to adopt. But the facts should clarify for the board that a change is needed: Xerox, granted a $74 million contract to build the state exchange, failed to have that exchange ready for rollout on Oct. 1, 2013, and it had been paid just $10 million through March because the website was still a disaster.

Money has to be a huge factor in the board’s decision. Indeed, Deloitte reported that any transition might require more federal grant money on top of the $84 million Nevada has received.

In reality, the threshold to cut bait has arrived. In fact, it probably arrived when the exchange board had to hire Deloitte. It sure didn’t get any better when Las Vegas attorney Matthew Callister filed a lawsuit April 1 alleging that two plaintiffs went uncovered even after paying several months’ worth of premiums through Nevada Health Link. It got far worse April 23 when Ms. Robison reported Mr. Callister’s release of documents from what he termed an anonymous source — thought to be someone within Nevada Health Link — alleging the state exchange at least secretly discussed dumping all enrollees from the system to start fresh on botched accounts.

Gov. Brian Sandoval’s decision to go with a state exchange wasn’t a bad one, but it suffered from incompetent execution, starting with the decision to have the exchange collect premiums and remit them to insurers, rather than have insurance companies bill customers directly. No other state took that course. But that decision goes to the heart of all the Obamacare exchanges: They exist only to hide the full price of premiums for people who qualify for subsidies.

All these issues should make this decision easy for the board: shut down Nevada Health Link and move Nevada onto the federal exchange to stem the bleeding. Meanwhile, Congress needs to keep working to get rid of Obamacare altogether, allowing individuals and businesses to buy coverage they can afford from private insurers.

It’s time to start over on health care reform.