Mass. problem: state exchange temporarily joining feds

Massachusetts will temporarily switch to the federal government’s health insurance exchange while it makes expensive repairs to its own site, which struggled to adapt to the requirements outlined in the Affordable Care Act.

The site’s struggles are somewhat surprising considering it served as the model on which the Affordable Care Act was based after being created as part of then-Gov. Mitt Romney’s health care reform act of 2006.

“This is now Massachusetts’ ‘Big Dig’ IT project,” said Joshua Archambault, a health care expert at the Pioneer Institute, referring to the Boston highway reconstruction project that took 15 years to complete and cost almost double than expected. “The decision was completely irresponsible to taxpayers, with very little uncertainty we’re going to get the end result that we want.”

Archambault’s comments to the Boston Herald, which said Massachusetts Health Connector costs have now exceeded $500 million when adding together federal grants, came as funds were needed to keep some residents on Commonwealth Care plans and technology fixes and changes as a result of the struggling system.

The Health Connector board last week approved a two-pronged approach to get the site into working order for the next open enrollment session, which begins in mid-November.

The first part will move the state to the federal exchange temporarily while simultaneously contracting with Virginia-based hCentive, the company that built Colorado’s exchange site. Minnesota-based Optum, with a no-bid contract granted through an emergency provision to sidestep state procurement law, will subcontract hCentive.

The plan is expected to cost the state between $100 million and $145 million, according to reports.

“The reality is, this is it,” said Sarah Iselin, who is helping the exchange on loan from her permanent position at Blue Cross/Blue Shield of Massachusetts. “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.”

Massachusetts officials have blamed the site’s failures on Virginia-based contractor CGI, who built a number of the state health insurance exchanges along with the federal government’s solution, healthcare.gov, which saw its share of problems during the initial rollout.

The state fired CGI in March and is now working to recoup some of the money it paid the contractor, something the two parties are currently negotiating.

Massachusetts isn’t alone in picking another state’s exchange software after its own system failed. Maryland fired its contractor Noridian in March, and it has decided to buy a system built by Deloitte while consulting for Connecticut for approximately $50 million.

Likewise, Massachusetts and Maryland are not alone in their struggles to build a working health insurance exchange. Nevada, Minnesota and Oregon have also had very public challenges. Oregon recently announced it will join the federal exchange for the upcoming enrollment period.

Massachusetts was one of 14 states, along with the District of Columbia, that decided to build its own exchange instead of relying on the federal government’s option. Some of those portals are running smoothly, including those in California, Washington state, Connecticut and Kentucky. However, in a half dozen other states, technical troubles have cropped up after exchanges launched last October, marring implementation of the health care overhaul.