Massachusetts and Vermont have suspended payments to CGI Group, the same contractor behind Healthcare.gov. A policy expert argues that CGI's failures are due to the complexity of the Affordable Care Act, also known as "Obamacare."
"The problem is the complexity of the laws," Ed Haislmaier, senior research fellow for Health Policy Studies at the Heritage Foundation, told The Christian Post in an interview Friday. Haislmaier argued that Obamacare required excessive regulation for the subsidies, causing the famous Healthcare.gov backup and the state backups as well.
The scholar turned to Massachusetts as a prime example. "Massachusetts has been running a similar program for subsidizing people to buy coverage since 2007," and this program was "politically in sync with the administration." Nevertheless, the state's exchange allegedly experiences so many problems that it has decided to publicly reprimand CGI, withdrawing money from the company.
Haislmaier explained that under Obamacare, determining the right subsidy for each applicant required a massive amount of information. The process first requires documents from the Internal Revenue Service, the Department of Homeland Security, and "various federal sites that don't work together." Then, the system has to calculate whether or not that person falls inside the poverty level, which in turn depends on criteria like the amount of people in the household.
Furthermore, those who already receive employer coverage – so long as that coverage meets the law's standards – cannot apply for a subsidy, even if their income is low enough to do so.
"Even the best IT vendor in the world is probably going to take a lot more work than has been put into this, to fix it," Haislmaier argued.
Jason Lefferts, director of communications at the Massachusetts Commonwealth Health Connector, told The Christian Post on Friday that "CGI has consistently underperformed" and at this point, "we have not received any new functionality from them that would require payment."
"Overall, the IT system remains far from where it needs to be," he said.
So far, Massachusetts has paid $11 million of its $69 million contract, but refuses to pay more until the company provides a functioning website, Lefferts told The Boston Globe.
Vermont is withholding $5.1 million from CGI, according to official documents from the Department of Vermont Health Access. The document lists four "Critical Milestones" which CGI has failed to meet, according to the terms of the contract.
"We have a pay-on-delivery contract model with CGI, which means the contract includes a series of milestones," Lefferts explained. Vermont's documents work on a similar model. Lefferts briefly listed the problems CGI has yet to fix: lagging system performance, time outs, random and sporadic error messages, and delayed delivery of enrollment to carriers.
Although Massachusetts first reformed its health insurance system in 2007, Lefferts explained that the state decided to set up "an entirely new online system to line up for the Affordable Care Act."
He promised that the state "will continue to apply pressure" on CGI in order to "ensure there are no gaps and delays for our customers."
"As frustrating as these IT problems are, we remain on track to attain our goals," Lefferts stated.
Despite these reports, anonymous sources told CP that no funding in either state has been cut off, and that Massachusetts is even working on new functions in addition to the current CGI contract.
When asked about the situation, Linda F. Odorisio, vice president for global communications at CGI, focused on the achievements of her organization. "CGI has led or played a major role on the most successful state insurance marketplaces in the country, including Colorado, Kentucky and California," Odorisio wrote to The Christian Post on Friday.
The CGI spokeswoman reassured CP that "the healthcare marketplaces in both Vermont and Massachusetts are successfully processing applications from citizens to enroll in insurance, despite media reports to the contrary." Odorisio reported that over 700 Vermont residents apply daily, while over 100,000 online applications are in progress in Massachusetts.
"CGI and its resources remain dedicated to delivering continuous improvements in system performance and the user experience in both states, working closely with government leaders to ensure that contract requirements for all parties are met," Odorisio wrote.
She also reported that CGI is discussing the best way to move forward with Vermont, after receiving its notice of withdrawing funds.
Meanwhile, Haislmaier predicts a similar fiasco in Hawaii, which also contracts with CGI and has only enrolled 683 customers in its exchange. "I don't see this being resolved anytime soon."