States Rebel Against Obamacare Website Contractor

For Christmas, Vermont and Massachusetts are giving a lump of coal to CGI Federal, the Canadian company that built Healthcare.gov and seven other state-based health care exchanges.

The two states have stopped payment to the contractor because, as with the national website, their health care portals left much to be desired. Massachusetts already had a health care exchange in place from when the whole thing was Gov. Mitt Romney’s idea, but the state took out a $69 million contract with CGI Federal to bring it in line with the Affordable Care Act.

As The Boston Globe reports:

Massachusetts has reverted to using an alternative software system and paper notifications for residents seeking new insurance, a significant black eye for a system that was held up as a national model for providing coverage after it debuted in 2007.

In Vermont, state officials recently alerted CGI that the state is withholding payment of $5.1 million as compensation for the company’s failure to meet key deadlines.

The state is also disputing more than $1 million in charges billed by CGI because of incomplete work that left its insurance website so far behind schedule that Vermonters could not buy coverage online, as promised under Obama’s health care law, until early December, two months after it opened.

Not all states have suffered to the same extreme. While the federal website, Healthcare.gov, has become a joke, Covered California, also built by CGI, performed much better.

Still, Vermont and Massachusetts could prove to be trendsetters. As The Verge points out, “CGI also built most of the federal marketplace, Healthcare.gov, which was also plagued by errors and downtime. The administration has not taken any action against the contractor, however, nor have any of the other five states for which CGI built exchanges with varying success.” That could change as the crown jewel of the Obama administration has come under renewed attack. It’s a political hot potato, and, with midterm elections coming up, it might be easier to throw the spud over the border into Canada.

— Posted by Peter Z. Scheer