Nevada is Scrapping Its Obamacare Exchange, Joining Healthcare.gov

Nevada, which had a $75 million deal with Xerox to build its
state-managed health insurance exchange under Obamacare, is
scrapping its current technology and joining the federally run
exchange system at Healthcare.gov.

It will be the second state to toss its custom-built exchange
technology and join the federal system. The first was Oregon, which
ditched its $300 million health exchange earlier this
year. 

The decision, which the Nevada health exchange board voted on
this afternoon, comes in the wake of a sobering report by
consultants at Deloitte, which
concluded that “the current project team has not proven they
can successfully deliver the required management, processes or
solution to successfully deliver an operational exchange.” As of
the middle of this month, the state’s exchange had only signed up
about 30 percent of its target of 118,000 people for insurance
coverage. 

The Deloitte report found that there were more than 1,500
defects with the Xerox-created system, about 500 of which were
categorized as “severe.” The report also said that the system Xerox
built was so bad, and its reliability with users so discredited,
that unless basic communications and trust issues could be
resolved, “the success of the project is not feasible.”

State exchange officials have reportedly indicated that they do
not plan to join the federal system permanently. Instead, they will
work with the federal government for next year’s enrollment, and
then, the following year, switch
back to a state-run system built on modified technology from
another state. Or at least that’s the hope. State officials
also “noted that they are allowed to rely on the federal system
indefinitely,” according to a report in
Politico.