Board approves fees for Nevada health insurance exchange

The board overseeing Nevada’s health insurance exchange approved fees Thursday designed to make the program self-sustaining by 2015 when federal support expires.“Obviously, the fees will be passed on to the consumer,” Jon Hager, executive director of Silver State Exchange, told board members. He added, “If we didn’t do this we would have to get money from somewhere else.”Gov. Brian Sandoval proposed and state lawmakers in 2011 approved the exchange, which is called for under the federal Affordable Care Act. But Sandoval has said he will not use general fund money for its support and that it must be self-sufficient to continue.States were given the option to develop their own exchanges or sign on to one run by the federal government. The goal is to help individuals and small businesses find health coverage by making it easier for them to compare policies and prices.Hager said the 2014 state exchange rate amounts to 1.7 percent of average premium costs in 2011. In comparison, he said the federal exchange rate is 3.5 percent. The percentage difference will save Nevada consumers about $3.2 million, he said.While the federal government is picking up most of the costs for the first year in 2014, an estimated $10 million, the fees will help build up reserves to run the program when federal funding expires.Health insurance plans that don’t include dental coverage will be charged $4.95 per individual policy per month. Those that include dental will be assessed $5.31, while the fee for stand-alone dental coverage will be 36 cents per policy.Thursday’s action set fees for 2014 only, though rates are anticipated to increase in following years. Officials project fees for medical policies will to rise to around $8 per policy, per month, by 2017.Nevada’s insurance exchange received preliminary approval from the federal government this month. Enrollment will begin in October, with policies taking effect Jan. 1.Officials estimate 118,000 people will sign up for insurance using the exchange, and project enrollment will grow.Scott Kipper, Nevada’s insurance commissioner, questioned what will happen if the fees don’t generate enough to operate the exchange.“What would be done to get the exchange whole in that event?” he asked.Hager said the exchange could ask to borrow money from the state general fund; it could “beg, plead” to the Legislature and governor’s office; or it could adjust rates.But, he said, “I think we have enough buffer in these rates to make sure that doesn’t happen.”One insurance industry representative asked whether carriers would be required to pay insurance premium taxes on the fees. Carriers pay taxes on the dollar amount of policies written in the state.Hager said the fees under existing law would be included for tax calculations, but added the exchange has submitted a bill draft request for the upcoming Legislature to exempt them from insurance premium taxes.