Massachusetts to Scrap Its Broken, $179 Million Health Exchange
Federal taxpayers chipped in $179 million so that Massachusetts could replace its functioning health insurance exchange with one that doesn't work. And now the state says it's just going to scrap everything it's done so far and start over.
The state's exchange has been one of the most troubled in the nation. In March, the state fired its tech vendor, CGI (the same company that built the federal exchange system). The contractor responded with a statement noting its own "tireless" work on the project and saying that it planned to work with the state "to ensure a smooth transition to the next phase of exchange deployment, allowing for the best use of system capabilities already in place."
Bay State officials now seem to think that the best use of the troubled Obamacare exchange is to leave it behind. The state now plans to toss the old system completely and buy a working, off-the-rack system that can then be customized to fit the state. And if that doesn't work, they'll just join the federal exchange.
Via The Boston Globe:
Instead, officials will buy an off-the-shelf product used by several other states to enroll residents in health plans, while simultaneously preparing to join the federal HealthCare.gov insurance marketplace if that product fails.
The state's insurance system needs to be ready by Nov. 15 for consumers to enroll in new health plans for 2015. If adoption of the new software, called hCentive, takes longer than expected, the state can connect to the federal marketplace for up to one year.
Massachusetts received a total of $179 million in federal grants to build its health insurance exchange, including a shared "early innovator" grant for states attempting to produce model exchanges. Obviously that didn't work out so well.
What makes this story extra infuriating, and more than a little ironic, is that Massachusetts was frequently cited as a model for Obamacare because it already had a functioning health exchange, put in place in 2006 as part of a state-based health policy overhaul under then-Gov. Mitt Romney.
That exchange wasn't the world's greatest idea. But it worked, in the most basic sense. You could use it to obtain insurance. Thousands of people did. However, it didn't do all of the real-time cost and subsidy calculations that Obamacare exchanges were required to do. So when Obamacare arrived, state officials got rid of it and built an expensive new system—a new system that, as we now know, didn't work at all, and cost taxpayers $179 million.
Will any of this money be returned? What are the chances that the new off-the-shelf system doesn't work, and Massachusetts ends up on the federal exchange, which was built by the same firm whose work the Bay State scrapped, and which remains a delay-plagued work-in-progress itself?