Two years into the grand experiment of setting up Nevada’s first health insurance exchange under the Affordable Care Act, the state is banking on one hard-earned prize after surviving its tumultuous launch: normalcy.
The switch to a hybrid health exchange last year paid off for the Silver State Health Insurance Exchange in the form of a smoother, more successful enrollment period — particularly when compared to the glitch-plagued launch under former provider Xerox.
As the program prepares for its third open enrollment on Nov. 1 under more stable circumstances, however, it continues to face challenges both old and new. The list includes continued resistance to the program among certain pockets of the populace, a reduction in the number of carriers in the Nevada market, as well as the quirks that come with a hybrid exchange.
The challenges are no secret to director Bruce Gilbert, a Texas transplant who was chosen to lead the retooled program last year as the new executive director of the Silver State Health Insurance Exchange.
This year, a top priority for Gilbert is to build on the momentum from last year. After only seeing 36,827 people sign up for a qualified health plan during the first enrollment period out of an initial goal of 118,000, the program saw nearly 60,000 people sign up during the first three months of enrollment last year. Just as getting new signups is important, however, maintaining existing ones is also key, according to Gilbert.
“I’m not just the head of a state agency but also a sales organization,” Gilbert said. “If I’m in sales, the first thing I want to do is retain current customers because the cost of retaining them is significantly less than bringing in new customers.”
Part of the exchange’s new playbook for audience growth and retention this enrollment period involves drilling all the way down to key demographics.
The strategy includes targeting certain zip codes, including those with a high number of self-employed residents or seasonal workers, for example.
“We need to pick up people in rural areas, young invincibles, the Hispanic population and even tribal members,” Gilbert said. “Instead of just having a broad message of ‘hey, everybody needs insurance,’ we’re starting to parse things more closely and target pockets of people.”
In addition to being more efficient, the approach allows the program to use its limited resources more wisely, Gilbert said. The fact that the Affordable Care Act is a politically charged topic means it is under tremendous scrutiny and pressure. In the last Nevada legislative session alone, the program faced four bills, which included an unsuccessful attempt to do away with the exchange.
Although health insurance exchanges nationwide have to deal with issues related to funding, not all such situations are created equal. Funds allocated to states, for example, are not directly tied to the number of enrollees, which can be a challenge for places like Nevada, according to Gilbert.
“While we have more people enrolled (than New Mexico) they actually have a budget that’s 40 percent bigger,” Gilbert said. “We’re all in the same boat but everybody’s situation is also different.”
HYBRID VS. SOLO
As a state that initially decided to form its own exchange, Nevada still has some leeway in how it uses its federal funds from the ACA.
Part of that leeway includes the option to step away from the ongoing hybrid arrangement that has the federal government handling the enrollment side of the program and creating a dedicated system for Nevada yet again. Gilbert estimates that the state has about $15 million to $17 million it can use to find another contractor should it decide to do so.
“We retain a fair amount of grant authority … that we can utilize to explore other technology solutions,” Gilbert said. “(Hiring a new contractor) is within the realm of possibility of what we can do.”
Doing so, however, likely won’t happen barring a significant change in the status quo between the state and the federal government. Since switching to the hybrid system, the federal government has been handling enrollment at no cost to Nevada. The federal government has made it clear to the state, however, that it plans to start charging for the service soon.
The question now is how much the price will be, which is still being negotiated. Because hybrid exchanges such as Nevada were not part of the original plan for the Affordable Care Act’s implementation, such costs were never planned for.
Depending on what range the costs fall under, Nevada will have to weigh the pros and cons of staying as a hybrid exchange. The debacle involving Xerox, for example, or Oregon’s even more disastrous attempt at a state exchange serve as exhibits A and B for what could go wrong when setting up one’s own system.
Although using the federal system has led to much needed stability in the enrollment process, however, it also comes with its share of downsides. One is loss of control over key data about enrollees and other metrics that are crucial in figuring out trends and what can be improved about the system.
“After the Xerox box got unhooked and we switched to the federal hub … we have to beat on Washington every day to get data,” Gilbert said. “Nobody ever anticipated a hybrid system like ours so we’re in the process of working on policies to allow us to get more of that data from them.”
As Nevada continues talks with the federal government about the cost of maintaining the state’s hybrid arrangement, the exchange is also trying to address other key issues while the enrollment period draws near.
One involves the reduction in the number of carriers. National insurance company Assurant announced earlier this year that it is pulling out of all exchanges. Closer to home, Nevada Health Co-Op is now in receivership through the state’s insurance division after high costs led it to go out of business.
Although customers for both plans will remain covered until Dec. 31, they will need to sign up with a new carrier in the upcoming enrollment period, Gilbert said. The three remaining options are Health Plan of Nevada, Anthem and Prominence Health Plan.
Insurance costs and access for rural areas, something that has always been an issue historically, also continue to be a challenge.
“Once you get to the rurals, the ability of insurance companies and hospitals to reach critical mass makes the economics much more difficult so it’s a little bit more tenuous there,” Gilbert said. “It’s not anybody’s fault, it’s just simply the way the state stacks up (in terms of population).”
For now, the program will focus on getting more of Nevada’s remaining uninsured into qualified health plans as well as minimizing attrition rates. The success of Medicaid expansion in the state during the first two enrollment periods means that particular avenue is nearly tapped out, making the non-Medicaid population the remaining area of opportunity for sign-up growth.
Although last year’s sign-up activity exceeded expectations, Gilbert understands the importance of seeing it in the right context given the problems with the initial launch.
“When Act 1 was setting yourself on fire, what’s Act 2?” Gilbert said. “The bar was set incredibly low.”
Given that the first two enrollment periods did not pan out as expected, one thing Gilbert says he won’t do is make predictions. Nevertheless, the number of enrollees remains the main metric for success, Gilbert admitted. Gilbert says he is also aware that the exchange is expected to do even better this year than last year.
Instead of simply obsessing over numbers, however, the approach that the exchange is taking this year is to ensure that people are aware of the enrollment period and making sure that everything is working as intended to make signing up as easy as it can be for Nevadans.
“I have conversations with the governor’s office and they never tell me, ‘Bruce, we expect you to sign up X number of people,'” Gilbert said. “Instead, the governor wants to know if we’re set up for enrollment and where we’re going to be.”
BY THE NUMBERS
- As of Sept. 26, 2015, Nevada has 621,000 uninsured, which is a little over 15 percent of the population, according to HealthCare.org.
- Prior to the Affordable Care Act, 20 percent of Nevadans were uninsured in 2013.
- In 2014, Kaiser Family Foundation projected that 49 percent of Nevada’s uninsured would be eligible for expanded coverage under the Affordable Care Act.
- As of June 2015, net enrollment in Medicaid and Children’s Health Insurance Plan in Nevada had grown by 230,924 people since late 2013 — an increase of 69 percent.
- An estimated 13 percent of Nevada’s uninsured are not eligible for coverage due to their immigration status.