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New Mexico Health Insurance Exchange's Online Market Faces Obstacles

The challenges could force N.M. to endure another year of relying on the federal website, which is blamed for the state falling short of its enrollment goals.

Most of the boxes are checked. The New Mexico Health Insurance Exchange expects to have all the technological pieces in place to take over the online insurance marketplace for individuals from the federal government this fall, its outgoing chief executive officer said Friday.

“The project overall is on track,” Mike Nuñez, interim CEO of the exchange, told the board shortly before learning that he would be replaced.

However, several obstacles remain that could force the state to endure another year of relying on the federal website, which members of the board that governs the exchange blame for the state falling short of its enrollment goals during the first open enrollment period that ended this spring.

“I have some concerns,” said Dr. J.R. Damron, chairman of the New Mexico Health Insurance Exchange board. “My optimism has dropped.”

An unresolved contract with Xerox for call center services that could prove costly to the state, and the absence of a mechanism to seamlessly enroll the 34,200 New Mexico residents who’ve already purchased insurance policies from the federal site are among snags that could force the state to rely on the federal marketplace for one more year.

New Mexico offered small group plans through its online marketplace but relied on the federal website for individual enrollment during the first open-enrollment period, which began last fall and ended in the spring.

Technical problems with the rollout of the federal portal last fall forced the New Mexico exchange board to dial back its goal from 80,000 individual enrollments to 50,000 – a number it still failed to attain. So the prospect of relying on the federal website for another enrollment cycle doesn’t appeal to the board.

But the consensus preference for a state-run marketplace may have to take a backseat to reality.

Timing figures prominently into whether the state exchange will take over the sale of individual policies. By July 31, the federal government will determine whether the New Mexico Health Insurance Exchange is ready to launch its own individual online marketplace in time for the Nov. 15 start of the next open-enrollment period under the Affordable Care Act.

If the federal government gives the state exchange its blessing, the state has the same deadline – July 31 – to commit to having its individual insurance marketplace operable by Nov. 15.

The timing creates a Catch 22 of sorts with the New Mexico Health Insurance Exchange’s call center operated by contractor Xerox in Alamogordo. The current contract with Xerox expires Sept. 30. It costs about $600,000 a year, but is only for referral services. So callers to the center are directed to call others who can better answer their questions.

One of the federal requirements the state must meet in order to take over the individual marketplace is a full-service call center which can process orders and answer questions. A contract with Xerox to perform those functions is cued up and ready to sign, but the New Mexico Health Insurance Exchange board has temporarily put the brakes on it.

The contract calls for $7 million annually for three years, and if New Mexico is forced to rely on the federal site for another year, more than $6 million could be wasted. However, a Xerox representative told the board Friday the company would be willing to extend its lesser contract for another year.

The board will decide at its meeting in Santa Fe on July 25 whether to move ahead with the contract for expanded services with Xerox.

Besides the Xerox contract, board members fretted about the problems the state could encounter recapturing the individual policy purchasers who used the federal site during the first enrollment period. They would not automatically be moved into the state-run marketplace, and all the federal government could promise was help reaching out to those policyholders in hopes that they would re-enroll.

“There are question marks. It’s a very, very tight timeline,” Damron said. “We have no leeway if something does happen.”

Despite heartening news from its information technology team about tests that show the state-run individual marketplace is on track for a November launch, board members were hesitant to commit to a state-run site prematurely.

Board member Dr. Deane Waldman used an analogy to an auto manufacturer to demonstrate his trepidation.

“The thought of putting a car on the market when we don’t know yet if the engine inside it works, although we have plans to test it, is not a wise decision,” he said.

©2014 The Santa Fe New Mexican (Santa Fe, N.M.)