Massachusetts Scraps Its Broken Obamacare Exchange, Requests $121 Million to Build Another One


Before Obamacare became law, Massachusetts was the only state in the nation with a functional, widely used health insurance exchange. But because the state's system didn't have all the fancy new features required under the new health law, including real-time verification of eligibility for subsidies, it began work on a new exchange to replace the old one.

Flickr/CC BY-NC-SA 2.0)

The Bay State received $179 million in federal funding to help build its new exchange, and last October, it replaced the old system with a new one designed to have all the nifty tricks that Obamacare requires, plus some more that state officials wanted.

But there was a problem. Unlike the old system, which could be slow but was generally functional, the new one didn't work. State officials began a repair effort, but ended up firing their tech contractor in March. Last week, the state announced that it was scrapping all work to date and starting over. Officials said they would attempt to install a completely new exchange that was based on existing technology, while also making backup plans to use the federal exchange if the new installation effort failed.

Naturally, the state now says it wants another $121 million from the federal government to get its exchange going. That's in addition to the nine-figure chunk of federal money they already wasted.   According to the Boston Herald, when you add up all the costs involved in attempting to build out an exchange for the state, that brings the total price tag to more than $500 million.

To recap: The state had an exchange that worked—well enough, in fact, that it was often cited as the model for the federal law. Officials scrapped that exchange for an expensive new one, which not only didn't work, but was eventually deemed beyond repair. And now the state wants $121 million in federal funding to try yet again.

It's the best they can do! They had no other choice!

"The reality is, this is it," Sarah Iselin, who is managing the state's exchange effort, said, according to the Herald. "When we look at what we can reasonably do for the fall, this is it. I wish we had more choices, but we don't. We're making the best of a really lousy situation."

I suspect that Sarah Iselin might benefit from Googling the phrase "sunk costs."

The state could probably just give up on its big dreams and join the federal exchange system for far, far less. Officials in Oregon, which also scrapped an expensive state-run exchange, say it will cost about $5 million to become part of the federal system.

Of course, that would require admitting failure, and giving up on the desire to have the fanciest, shiniest, most impressive insurance exchange in the nation. As the Herald notes:

Publicly, state officials — including Gov. Deval Patrick — have blamed the debacle largely on [tech contractor] CGI.

But documents obtained by the Herald and interviews with project staffers in February revealed infighting among top Patrick administration officials and an obsession with building "the absolute Rolls-Royce of any health exchange" that helped doom a website plagued with delays since March 2012.

Well, they certainly spent Rolls Royce money. But they didn't even end up with a Yugo.

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  1. …infighting among top Patrick administration officials and an obsession with building “the absolute Rolls-Royce of any health exchange” that helped doom a website plagued with delays since March 2012.

    This I believe.

    1. …and this reminds me of every software design meeting I’ve ever had the misfortune of attending. Especially those with a greater number of managers than programmers.

      1. “Okay, now that we’ve spent 70% of our budget having meetings about the fonts, colors, and control placement on the login screen, go build us something spectacular!”

        1. At least they let you have a login screen.

          I always go to the meetings where they talk about having a super secure site, but we don’t want to pester the users with having to remember a password.

          Or pay for a ssl cert. That is just wasted money.

        2. My dad said every Ocare meet he sat in on in Oregon was the tech people saying that no, they can’t make this pig fly while the managers said, “Well, the governor says we have to do this,” as though that magically makes pigs able to fly. http://www.youtube.com/watch?v=BKorP55Aqvg

  2. You ratbagging teafuckers just need to accept this glorious consumer choice protection is here forever. Voters love it and will reward TEAM DONKEY for this!


  3. RIP Romneycare.

  4. Man, if only they had enough Certified Scrummasters, and really stuck to the Agile templates the PM sent around, maybe had just a few more standup meetings, I’m sure it would have worked.

    1. They ran out of post-it notes.

        1. I’ll bet the biggest problem was that the contractor delivered what they were asked to deliver.

          1. And yet somehow buildings that don’t fall down get built every day, and both the client and contractor are happy.

            1. I’d love to see the requirements documents attached to this contract. I’ll bet they were so vague that CGI knew it could deliver anything it wanted and still get paid. So look what they delivered.

              1. “Contractor will build an application that meets all of the business requirements identified in the discovery phase.”

                Business Requirements:
                *Resurrect the dead
                *Cure the sick

                Nice to have:
                *Turn water to wine
                *Allow MA citizens to utilize the Federal exchange

                1. I know I get points off for double linking, but, this: http://www.youtube.com/watch?v=BKorP55Aqvg

                  1. That was so funny, it’s worth the double link.

              2. I suspect that CGI wanted to deliver a decent product, get the good publicity and much more importantly a ton of follow up contracts. However, the specs were most likely contradictory, ever changing and they could never get the necessary rights, permissions and data in at timely manner.

  5. Don’t worry:

    Progressive Bloggers Are Doing the White House’s Job

    He had The New Republic’s Brian Beutler dismissing Benghazi as “nonsense.” He had Slate’s David Weigel, along with The Washington Post’s Plum Line blog, debunking any claim that the new email was a “smoking gun.” Media Matters for America labeled Benghazi a “hoax.” Salon wrote that the GOP had a “demented Benghazi disease.” Daily Kos featured the headline: “Here’s Why the GOP Is Fired Up About Benghazi?and Here’s Why They’re Wrong.” The Huffington Post offered “Three Reasons Why Reviving Benghazi Is Stupid?for the GOP.”

    It’s been a familiar pattern since President Obama took office in 2009: When critics attack, the White House can count on a posse of progressive writers to ride to its rescue. Pick an issue, from the Affordable Care Act to Ukraine to the economy to controversies involving the Internal Revenue Service and Benghazi, and you’ll find the same voices again and again, on the Web and on Twitter, giving the president cover while savaging the opposition. And typically doing it with sharper tongues and tighter arguments than the White House itself.

    1. Journolist never really closed and the Juiceboxers are still towing the lion? I am shocked.

  6. The hacks who brought you the Big Dig debacle team up with Obamacare – unexpected results ensue.

  7. I don’t understand what the point of having state exchanges separate from the federal exchange was in the first place. Was it to preserve the illusion of state sovereignty? Were the states so gunshy of the Federal government’s ability to get the exchange up and running that they wanted to reserve the right to make their own? Was the Fed so concerned about load that they wanted to encourage as many states as possible to handle their own populations? It’s shocking, I know, but it seems like every aspect of this thing has been wrought with a lack of coordination, inefficiency, and planning.

    1. Here in Oregon I think it was an attempt to prove who the real progressives are. And, fyi, we spent twice as much as those losers in Massachusetts and achieved nothing. I think we all know who the true liberals in the room are now…

      1. “we spent twice as much as those losers in Massachusetts and achieved nothing”

        You’re much too modest. Oregon achieved the theft of hundreds of millions, and the empowering of the Government Class and it’s cronies.

        Well done!

        1. How much did they spend in OR. Here it was about $15 per person per year. That’s less than I spent on lunch at the burrito place today.

  8. The states that refused to try to create their own exchanges are really starting to look like idiots. They could have wasted 9 figures of federal tax dollars in their state and STILL joined the federal exchanges in the end. What were they thinking?

    1. Its the cynic’s dilemma. Now they regret that they weren’t cynical enough about how it would work.

  9. This reminds me of that line from True Lies. Ballsy, stupid, but ballsy…

  10. Start working at home with Google! Just work for few hours. I earn up to $500 per week. It’s a great work at home opportunity. I can’t believe how easy it was once I tried it out. Linked here http://www.Pow6.com

  11. So if the government is this horrendous with the health exchanges, then why is it folks believe the services would be any different with the poleeese, ROADZ! or fire departments, or de FeNCE????

    This blatant robbery is disgusting, the nerve to even ask for more money deserves a kick in the balls, and the teeth too.

    1. Yes, but liberals need their teeth, but I think they’ve proven they really don’t need…a working healthcare exchange.

    2. So, instead I should trust the Kochs or Bernie Madoff to put out my fires…they will do so at the “market rate”.

      Gubment sucks. But it’s better than the alternative.

  12. So Mass. has been taken over by a bunch of Faux News watching Teabagging Racists who just want to see Obama fail? Because it seems that I was assured by Team Blue apologists that those are the type of people that live in states that didn’t set up their own exchanges.

  13. “Massachusetts Scraps Its Broken Obamacare Exchange, Requests $121 Million to Build Another One”

    Lemme fix that for ya.

    “Massachusetts Scraps Its Broken Obamacare Exchange, Requests $121 Million to Spend on the Government Class and their Cronies to Build Nothing Yet Again”

  14. So glad that that Deval is done in 2016. Looking at that weasily smirk makes me want to puke almost as much as listening to his whiney “tenor with tight shorts” voice.

  15. Ok, sorry – but I have to once again school Petter in economics…and add some technology to the mix.

    Peter, how is windows 3.1 and Word 1.0 working for you these days? Oh, you don’t use it? You mean it doesn’t work well anymore and you, an individual, have probably spent $100+ per year upgrading your OS and apps? Can’t be, right? Rolls Royce Money???

    Yes, it would be great if the first airplane the Wright Brothers came out with was a G5 Gulfstream and the first car a Tesla. But only a fool would measure against this metric.

    Let’s get down to economics.

    First, the Boston Herald is a hack paper – their 500 million dollar figure is bogus. Le’t use a figure of 300 million dollars – and, that it is all spent over a period of three years.

    That’s 100 million dollars per year. Let’s even add to that and suggest it would cost $100 million yearly to keep it up and upgrade it.

    That comes down to about $15 per resident per year.
    The actual average cost of health care for a US Citizen is about $8500 per person per year.

    So, let me get this straight. First, I’m supposed to cry about $15 a year and call is “Rolls Royce”. Secondly, Peter doesn’t seem to have a big problem with the TRUE Rolls Royce money, that being the actual cars that his corporate fat cat friends who make (excess) money off predatory health care drive around in.

    Wow, reason is really reaching. Articles such as this can only appeal to those who have never done basic math.

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