$3.5M added to Nevada Health Exchange contract

CARSON CITY, Nev. (AP) -- Nevada authorized spending another $3.5 million Tuesday for a private contractor to meet work change orders needed as the state prepares to roll out its health insurance exchange in three weeks.

The state Board of Examiners approved the additional funding, bringing the total contract with Xerox State Healthcare LLC to $75.4 million, all paid by the federal government.

Nevada's online insurance exchange, called Nevada Health Link, was created to meet mandates of federal health care reform and has been in the works for two years. Enrollment begins Oct. 1.

But exchange officials said federal rules are still evolving and the contractor will need to make costly, last-minute changes as rules are finalized.

Shawna DeRousse is chief operating officer of Silver State Health Insurance Exchange — the agency that oversees the online insurance marketplace called Nevada Health Link. She told the board chaired by Gov. Brian Sandoval that testing is ongoing to be certain that all components, including interaction with federal hubs to verify records with the Social Security Administration, Department of Homeland Security and the Internal Revenue Service, work flawlessly.

"As you go down the road in testing, you don't know what you're going to find," DeRousse said. "You fix one thing, something else pops up."

Jon Hager, executive director of the exchange, said Nevada is somewhere in the middle when it comes to states being ready by the Oct. 1 deadline when enrollment begins.

"It will be a challenge," he said. "We are making progress."

An estimated 592,000 Nevadans — 22 percent of the population — lack health insurance coverage. State officials estimate 118,000 people will sign up for insurance through the exchange, which will calculate federal subsidies to offset monthly premiums for people with incomes up 400 percent of the poverty level.

Sandoval, a Republican who opposed the health care reform law, in 2011 backed Nevada creating its own insurance exchange instead of relying on the federal government to do it and charge the state.

"This is tough," Sandoval said at Tuesday's meeting. "This is new. This has never been done before."

He said "curveballs" lobbed by the federal government over rules and regulations don't help.

"We know there's not going to be perfection," Sandoval said, adding that he believes Nevada's program will be a model for other states once the kinks are worked out.