As most readers of this blog will recall and at the birth of Obamacare, all of the states had the option of developing their own health exchange web sites or opt to use the federal version (see: How Kentucky Built a Workable Insurance Exchange Web Site). Some of the states with their own locally-developed systems have had significant problems (see: State Officials Cite Technology Problems on Health Insurance Sites). The worst case is probably Maryland which is reported to be shutting down its web site and substituting the successful one developed by Deloitte for Connecticut (see: Maryland set to replace troubled health exchange with Connecticut’s system). Below is an excerpt from the story:
Maryland officials are set to replace the state’s online health-insurance exchange with technology from Connecticut’s insurance marketplace...an acknowledgment that a system that has cost at least $125.5 million is broken beyond repair....Marylanders will be able to use the exchange even as it is being overhauled....Like Maryland, Connecticut was one of the first and most enthusiastic states to embrace the idea of building its own insurance exchange rather than using a federal site to implement the law’s sweeping changes in health-care coverage. But unlike Maryland, where the system crashed within moments of launching and has limped along ever since, Connecticut’s exchange has worked as smoothly as any in the country. Maryland is not alone in having deep-seated problems with its health marketplace. Technical issues also have plagued Oregon, Minnesota and Hawaii. But Maryland will be the first to walk away from its site....It was not immediately clear how much more money Maryland may have to invest to get a fully functioning system,....The money the state has already spent has gone toward development and operation of the Web site and for agency operating costs. The existing Maryland system will stay operational for “a period of time” while the Connecticut version is being installed....Some of the hardware that Maryland bought for its system, such as servers, can be salvaged, but the software and coding that are the guts of its online marketplace will be replaced, said the individuals familiar with the decision. To knit together the new system, Maryland will turn to the consulting firm Deloitte, which wrote the code for Connecticut’s exchange.
So the Maryland system that cost "at least $125.5 million" is being scrapped. The amount of money wasted is largely irrelevant, of course, because all of the state "go-it-alone" initiatives were funded by federal grants. The article does not comment on what it will cost to replace the Maryland system with the Connecticut system. It's also interesting to note that Maryland does not seem to be considering using the federal system. My conclusion is that they have more confidence in the one developed in Connecticut.
Here are some interesting quotes from the NYT piece referenced above and describing problems with the state exchanges (see: State Officials Cite Technology Problems on Health Insurance Sites):
- Tom Matsuda, the interim executive director of the Hawaii exchange, said that it had received $205 million in federal grants and enrolled only 7,600 people. That works out to an average of $27,000 for each person enrolled
- Dr. Joshua M. Sharfstein, the chairman of the Maryland health exchange, and Jean Yang, executive director of the Massachusetts exchange, blamed information technology companies for many of their problems.
- Hawaii and Massachusetts used technology provided by the CGI Group, the main contractor for construction of the federal exchange.
You may remember my previous note about CGI Group (see: Problems with the ACA Health Portal; Implications for Its Future Success). This was the original prime contractor for healthcare.gov that was replaced by another software contractor, QSSI, which is owned by UnitedHealth, one of the large health insurance companies in the country (see: Major Conflict of Interest with QSSI, the Contractor for the Health Insurance Exchange). The saga continues.