EDITORIAL: Time to exchange the exchanges

More and more, the Silver State Health Insurance Exchange looks like a sinking ship. So it should have come as no surprise that its captain jumped into a lifeboat last week. As reported by the Review-Journal’s Jennifer Robison, Jon Hager, executive director of the exchange, announced he would resign from the agency effective March 14.

The question isn’t why he left. It’s why he would stay. The exchange’s website, Nevada Health Link, is a debacle that developer Xerox can’t seem to fix. The problems are so bad state officials might decide to fire the vendor and join the federal Obamacare exchange. That HealthCare.gov is working much better than Nevada Health Link says it all.

Enrollment through the Nevada exchange is pathetically low, with just 17,047 paid-for policies issued as of Feb. 15. The state is miles from its March 31 enrollment goal of 118,000.

But these issues are far from a coincidence, and Nevada isn’t alone. Several states are neck-deep in Obamacare exchange problems. Maryland just fired the contractor that built its exchange and the executive director of Maryland’s exchange resigned in December.

All this has taken place despite President Barack Obama’s assurances on Sept. 26 — just five days before the dreaded Obamacare launch — that states such as Nevada that built their own exchanges would be better off. “It’s going to be smoother in places like Maryland where governors are working to implement it rather than fight it.”

Apparently not. But the shortcomings are not solely attributable to programming. Exchange websites (and the overwhelming majority of the Affordable Care Act itself) are having such trouble because of the overreaching scope of the law — the federal intrusion on the insurance industry and the whole subsidy boondoggle. It does too much.

Federal and state exchange websites must be married to IRS systems and have access to loads of other information to determine whether a potential enrollee qualifies for a subsidy. The Obama administration knew the Affordable Care Act would make health insurance more expensive — contrary to the president’s promises — so the exchange websites had to be built to give customers a subsidized policy price, lest all applicants suffer a sticker shock-induced heart attack.

That’s a problem with the law that cannot be disguised. Everybody now knows that health insurance via Obamacare is more expensive for coverage that isn’t as good. And if you live in rural Nevada, or rural anywhere, it’s even worse. Ms. Robison reported Sunday that Nevada’s 10 designated rural counties rate as the third-most-expensive insurance market in America, with the lowest-price Silver Plan costing $456 a month for an individual.

Silver State Exchange board member Lynn Etkins called Nevada Health Link’s system failures “catastrophic” and said it’s time to create a “disaster recovery plan.” Indeed, but there is no recovery from a Titanic-level disaster. You can only start over. It’s far past time to repeal Obamacare and start over on health care reform. Absent that, a good place to start is the remaking and simplification of the exchanges. Have separate application processes for insurance and subsidies.

There’s no sense waiting until it’s too late to abandon ship.