Massachusetts Spends $224 Million to Break Workable ‘Romneycare’ Exchange

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Posted by Caroline Anderegg on Thursday, July 30th, 2015, 9:00 AM PERMALINK

When Obamacare was passed, Massachusetts served as the prototype for state exchanges, as it already had its own online insurance portal in place that had worked for years.  However, federal bureaucrats determined that the Romneycare exchange wasn’t up to par with the extensive requirements in place for the new Obamacare state exchanges, and officials began constructing a new site pitched as a massive upgrade for Bay Staters. But after $224 million in federal funds and years of development the new and “improved” exchange failed utterly and resulted in an estimated $1 billion in costs for the state.

Massachusetts contracted CGI Corp. to design the revamped site—the same major information technology consultant that was used to set up the federal health care exchange. Just like the federal exchange, Massachusetts was an abject failure.

The health connector was nearly inoperable during the first open enrollment period, and in its first three months enrolled just five percent of its target. CGI was fired from the project and a new team was brought in to start from the ground up for a second time, but CGI was still paid $52 million of its $89 million contract with the state.

Not only did the Commonwealth Connector Authority (CCA), the state agency tasked with overseeing the project, utterly fail in its first three months, they actively sought to conceal the site’s shortcomings from the Centers for Medicare and Medicaid Services, the Health Connector board of directors, the media and the public. Furthermore, they urged state workers to approve subpar work and attempted to cover up the site’s stagnant progress by skirting testing requirements.  When they did test a portion of the website prior to the launch, there was a 90 percent failure rate.

A new contractor was not the fresh start the CCA was hoping for, and the health connector was proven a disaster almost beyond repair.  At a board meeting in February 2014, Massachusetts Health Connector executive director Jean Yang was brought to tears at the abysmal performance of the exchange, as over 50,000 applications were piled up waiting to be manually entered into the computer system. With each application taking close to two hours to process, it would take 50 employees nearly a year to complete the backlog of applications. In the meantime, those applicants were placed on inadequate, temporary coverage in order for them to remain insured.

Massachusetts had hoped to enroll 250,000 applicants, yet their actual enrollment for the year was 31,695—a measly 13 percent of their goal. The Massachusetts disaster did not just prevent individuals form signing up to Obamacare. It also displaced over 300,000 individuals from Medicaid. In all the debacle cost an estimated $1 billion, according to the Pioneer Institute. At present the exchange has a total enrollment of 124,010, far below what officials had hoped at the outset of the project.

Unfortunately, Massachusetts is no isolated, extreme case. Oregon has also come under fire for wasting $305 million in federal grants with nothing to show for it, and countless other state exchanges remain teetering on the brink of financial collapse.

On the surface, the failure of the Massachusetts Health Connector represents willful incompetence on behalf of CCA.  But under even the slightest scrutiny the state’s execution of the exchange reeks of fraud, evidenced by their lies to both federal officials and the public about the “upgraded” site.  

Photo Credit: 
Robin Schmidt,