Health exchange fees to increase in 2015

Nevadans who purchase health insurance through the state exchange will pay more in monthly fees next year to sustain the program, though how much has yet to be determined.

The Silver State Health Insurance Exchange board on Thursday narrowed its options to three pricing scenarios based on projected enrollments in 2015.

Currently, each medical policy purchased on the exchange carries a $4.95 monthly charge. But that fee will nearly double if not triple in 2015, depending on a final enrollment projection the board decides on when it meets next month.

For the board and health exchange staff, trying to forecast enrollment is a crap shoot, as evidenced by the dismal performance of this year’s signups that were marred by a bungled software system and computer problems.

Officials had projected 118,000 signups from Oct. 1 through March 31, when the open enrollment period ends. To date, about 23,000 have actually paid for their coverage through the exchange, largely because of problems in the computer system developed by Xerox.

Because of all the problems, officials last week approved a 60-day extension through May 30 for people who have been trapped in the system and unable to complete their applications. Xerox officials Thursday said that could involve as many as 77,000 people, though the probability of how many will actually take advantage of the grace period was estimated at somewhere between 18,000 and 44,000.

Setting a target is critical and something the exchange will “need to live and die on” for the next year, said Damon Haycock, the program’s finance officer.

Using existing enrollment, a monthly fee of $13.25 would be needed to break even and assure the exchange has cash reserves for 30 days.

Fixed costs for staff, rent and general office operations are estimated at $4.7 million for the upcoming year.

But there are other elements in play, and each carries a price tag — enrollment numbers, marketing, billing options and continuing enrollment assistants.

First-year operations were paid with federal grants. But beginning in 2015, state exchanges must be self-reliant, and Gov. Brian Sandoval has said he will not use general-fund sources to support it.

The board on Thursday agreed to increase funding for enrollment assisters by 30 percent next year and to keep marketing expenses that average $500,000 a month the same.

The board also voted to discontinue individual billing through the exchange, a move that will shave about $1.84 off monthly fees. Billing by Xerox has been particularly troublesome, and insurance carriers will take over those operations.

Given those directives, staff calculated monthly fees would have to increase to $15.36 if the board sets an enrollment target of 60,000 for 2015. The charge falls to $11.68 at 100,000 and $9.84 should 150,000 people sign up for coverage.

Board members postponed until April a final decision on the final enrollment target.