$72 million approved for insurance exchange

A state board approved a $72 million contract Tuesday to implement a health insurance exchange in Nevada under the federal Affordable Care Act, but Gov. Brian Sandoval said the program will need to become self-sustaining if it is to continue.

The contract approved by the Board of Examiners is with Xerox State Healthcare to set up the computer system and operations needed to begin enrolling people by October 2013. Startup costs are being funded through federal grants. So far, Nevada has received $25 million and state officials are awaiting approval, expected in the next few days, on another $50 million.

Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, the other two members of board, joined Sandoval in approving the contract.

The contract would run through 2016, but programs are supposed to be self-funded after 2014 and the state would assume all operational costs on Jan. 1, 2015.

Jon Hager, executive director of the Silver State Health Insurance Exchange, estimated costs for the last two years of the contract at $36.8 million.

Sandoval, who as a candidate opposed the Obama administration's health care reform package, signed legislation last year creating Nevada's insurance exchange, saying it was in the state's best interest to set up its own program rather than cede control to the federal government, which could then charge the state.

But the Republican governor said he would oppose long-term funding of the exchange that would take money away from other state programs or raise insurance premium taxes.

"I'm not going to be supportive of taking general fund dollars," Sandoval said.

It's an issue that will be addressed sooner rather than later as state agencies and the administration prepare a proposed budget that for the upcoming biennium that begins July 1, 2013, and runs through June 30, 2015.

Nevada's 2013 legislative session begins in February.

Hager said the contract contains termination and other safeguards should the federal law be repealed by Congress, federal grants are denied, or the state decides not to continue the exchange program.

The state board that oversees the exchange is scheduled to meet Thursday and will discuss possible funding means as well as updated budget and enrollment projections.