Nevada’s program, called Nevada Health Link, is scheduled to go into operation by 2020.
The Affordable Care Act gave states a choice between joining the federal health insurance exchange or administering their own versions, called state-based marketplaces (SBMs). Nevada, along with five other states, had been operating a blended form that placed an independently managed state-based marketplace on the federal tech platform.
‘Free Market in Reverse’
Gerard Scimeca, vice president of Consumer Action for a Strong Economy (CASE), says the main ingredient missing from these attempts to tinker with the Obamacare system is an infusion of true market forces. Anything subsidized by government inevitably becomes exorbitantly expensive, Scimeca says.
“What health care needs more than anything are free-market forces that drive competition, give consumers choice, and lower prices, but what we have now is just the opposite,” Scimeca said. “With endless public funding in the form of taxpayer-provided subsidies, mandates on insurance coverage, and public control of a significant part of health care in this nation, price mechanisms are incentivized to raise costs. When something is both mandated and subsidized, there is only upward momentum on costs, and less consumer choice.
“It’s the free market in reverse, and if it continues it will push even more people into government programs because it is becoming increasingly difficult for people to pay for the coverage best suited to their individual needs,” Scimeca said.
Desire for Autonomy
The state is making the move in order to gain tech autonomy and access to its own data, both of which are limited on the federal tech platform, Nevada Health Link Executive Director Heather Korbulic said in an April interview discussing the plan with the National Academy for State Health Policy (NAHSHP). On August 14, Nevada Heath Link announced a contract with GetInsured, a company that manages health insurance marketplaces in seven other states, to set up the state-run system in Nevada.
We … believe this is a chance for us to control our own destiny by managing our own marketplace,” Korbulic told the NAHSHP. “We have seen the limitations that come with working with the [federal system]. There is very little flexibility given to states. Any small change we request to try to tailor the system is almost impossible to accomplish.
“There is also a lack of insight into our own state’s data,” Korbulic said. “Without data, we have no sense of who our consumers are at any given moment. We are periodically provided ZIP code-level data breakdowns from CMS [Centers for Medicare & Medicaid Services] during the year but, for the most part, we do not know who is actively engaged in the system during the open enrollment season or other detailed information necessary to conduct truly targeted outreach. We think there are budgetary efficiencies to be found by having access to our own data.”
Scimeca says doubling down on what hasn’t worked is a recipe for disaster. Some states attempted to set up their own exchanges when Obamacare first went live in 2014, but they ultimately migrated back to the Obamacare exchange after experiencing insurmountable technical difficulties and finding costs were still high because of the government mandates inherent in Obamacare. Nevada was one of those states.
“With regard to the Nevada exchange, as a general rule it’s typically a good thing when states are free to experiment with ideas that serve their individual residents and move away from federal templates,” Scimeca said. “But we should add: buyer beware. States moving away from the federal exchange have been a mixed bag so far, with outright disasters in states like Oregon, Massachusetts, and Minnesota. Nevada believes they are saving money overall and giving their residents a more user-friendly experience, but only time will tell if that’s true.
“Unfortunately, this is just a different road to the same disappointing destination, with Obamacare plans still heading upwards with double-digit rate increases almost yearly and consumers still largely unable to buy a plan best suited to their individual needs,” Scimeca said. “President Trump deserves credit for working to eliminate mandates and allow for associations to purchase individualized health plans for their members, but these are just small islands of market reforms in an ocean of government-mandated health care.”
Corrine Alberts, “Nevada’s Insurance Exchange Director Talks about Transitioning to a State-Based Marketplace and Saving Millions,” National Academy for State Health Policy, April 24, 2018: https://nashp.org/nevadas-insurance-exchange-director-heather-korbulic-talks-about-transitioning-to-a-state-based-marketplace/