Obamacare Contractor Changes Made to Avoid Insurance Chaos

Thursday, 23 Jan 2014 07:54 AM

By Elliot Jager

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In order to justify replacing the company that built the Obamacare website with a no-bid contractor in quick order, the Centers for Medicare and Medicaid Services portrayed the nation's entire healthcare insurance system as being at risk.

According to Fox News, the CGI Group that built the HealthCare.gov insurance exchange was replaced with Accenture before the CGI contract was set to expire Feb. 28. Accenture, the second largest technology consulting firm in the world, was awarded the $90 million contract without having to submit a bid, Fox reported, after the centers determined the insurance industry would face "default" and "services and coverage to consumers" would be disrupted if continuing problems with the Obamacare website weren't corrected in short order.

CGI has been blamed for most of the problems with the website since its launch on Oct. 1. But an official with the Canadian-based company insisted earlier this month that CGI was not fired but simply chose not exercise an option that would have left it in charge of the Obamacare site for two more years. According to the New York Times, this official also said the company was proud of the work done on the site.

"Let me be clear, we were not fired," CGI Senior Vice President Lorne S. Gorber told the Times.

But Fox News reported Wednesday that CGI had been forced out. Fox cited administration documents warning that "the entire healthcare reform program" could be "jeopardized" if changes weren't made.

Still, some subcontractors and outside experts blamed the Centers for Medicare and Medicaid Services, which is charge of administering the HealthCare.gov site, for many of the problems, including issues that have yet to be resolved concerning insurance enrollment verification and federal subsidy payments to insurance companies.

Economist Doug Holtz-Eakin told Fox that the back end of the Obamacare site has yet to be completed with the result being that insurers do not know "who's signed up and what subsidies they get.

"There's no way to effectively match policies and people," he said.

As a temporary measure, the system relies on insurers to estimate their costs based on the "honor system," Jim Capretta of the Ethics and Public Policy Center also told Fox.

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