The total cost to implement Obamacare in Massachusetts surpassed a half-billion dollars yesterday, as the Health Connector board agreed to seek an additional $121 million in federal funds to try to rescue the money-hemorrhaging health exchange.
"This is now Massachusetts' Big Dig I.T. project," said Joshua Archambault, a health care expert at the Pioneer Institute. "The decision was completely irresponsible to taxpayers, with very little uncertainty we're going to get the end result that we want."
The board approved a two-track plan yesterday — invoking an emergency provision to sidestep state procurement laws — to award a no-bid contract to Minnesota-based Optum. The company will, in turn, subcontract with hCentive — which it holds a 24 percent stake in, as the Herald first reported yesterday.
Connector officials insisted the exchange is so broken they had no choice.
"The reality is, this is it," said Sarah Iselin, the state's Obamacare czar. "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."
Federal taxpayers will be asked to shell out the cost of pursuing a "dual track" of simultaneously implementing software to build a new state exchange and joining the federal Healthcare.gov as a fallback plan.
Only board member George Gonser Jr. voted no, arguing it could make insurance more expensive.
"We all know there's an incredible impact on the carriers, and ... these costs trickle down to users and subscribers and small businesses," he said.
The health plans this week warned that some Bay Staters may lose their plans this fall as carriers struggle to comply with the state's two-track plan.
The Massachusetts Association of Health Plans sent letters to board members hours before yesterday's meeting urging them to delay action and cautioning that "health reform efforts ... are in serious jeopardy."
Iselin, a Blue Cross/Blue Shield executive, said the Connector is working with the carriers and understands their predicament.
For taxpayers, Obamacare in Massachusetts has been a more-than-half-billion-dollar blunder. It amounts to: $270 million in federal grants to implement the law, an estimated $120 million through the end of the year to keep some Bay Staters on Commonwealth Care plans, $50 million to pay Optum for easing an application backlog and between $100 million and $145 million for the two-track plan.
And that doesn't include the cost of temporary Medicaid insurance for Bay Staters, which will be split between the state and feds.
The state could save some money if it doesn't have to pay CGI, which developed the initial site, but the two sides are in ongoing negotiations about the fate of the system code.
Publicly, state officials — including Gov. Deval Patrick — have blamed the debacle largely on 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.
Ironically, officials at the Colorado health exchange, where hCentive was hailed for its work by Iselin yesterday, announced this week it had signed up 129,000 residents for insurance since Oct. 1, attributing the feat to CGI for delivering on a "realistic plan."
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