Obamacare’s Fate Put in the Hands of a New Federal Contractor
Accenture (NYSE:ACN) — one of the largest technology-consulting firms in the world — will now be responsible for the technical improvements for Healthcare.gov — the webportal linking all 36 of the federally-facilitated insurance marketplaces created as part of the Affordable Care Act’s exchange system.
Even before the Obamacare marketplaces launched on October 1, several government reports, including one from the Government Accountability Office, warned that the exchanges would not be ready for enrollment by that deadline, and soon after they went live it became obvious that insurance enrollments would be significantly impacted by the design flaws and software errors that caused the federal health care websites to malfunction. During their first weeks of operation, technical glitches resulted in hours-long wait times, preventing potential customers from creating accounts and completing the 30-step enrollment process. Now, three months after that debacle, the Obama administration has decided not to renew its contract with CGI Federal.
In 2011, the Centers for Medicare and Medicaid Services, the government agency responsible for overseeing the construction of the federal exchange system, hired CGI Federal — the American subsidiary of the Canadian-based technology firm CGI Group (NYSE:GIB) — to build one of the most of the most complex computer system the federal government has ever attempted to set up. Yet, as testimony before congressional panels and email correspondence between CMS staff on the contractors revealed, it was CGI Federal’s federal to deliver on a few important tasks that was largely responsible for Healthcare.gov’s disastrous launch.
To succeed CGI Federal, the U.S. government awarded Accenture’s Federal Services unit a one-year contract, worth $45 million for the initial phase of the project, the company announced in a statement issued Saturday. “We are honored to be part of the team of technology and healthcare companies and government professionals helping the federal government meet the healthcare coverage needs of its citizens,” the unit’s Chief Executive David Moskovitz said in the press release. “Accenture will bring deep healthcare industry insight as well as proven experience building large-scale, public-facing websites to continue improving Healthcare.gov.” The company will help Centers for Medicare and Medicaid Services prepare for the October 2014 enrollment period, provide “24/7 support” for the marketplace application, eligibility, and enrollment functions, and generate and transmit enrollment forms and features.
Technology problems translated into enrollment problems for the Obama administration almost immediately after the exchange websites went live. Documents obtained by Republican Representative Darrell Issa of California show that in the first day of the six-month sign-up period, just 6 people nationwide had actually enrolled for insurance plans.
By the the end of October, just 26,794 people had enrolled through the federal health insurance exchanges and 106,000 individuals had enrolled through the state-based marketplaces, even though Healthcare.gov and the state-based exchanges saw more than 26.5 million unique visitors during that first month of the enrollment period. These numbers and the glitch-riddled debut of the cornerstone provision of the Affordable Care Act left the Obama administration fighting an uphill battle: reversing the tidal wave of criticism and political backlash that error-riddled, October 1 launch of the insurance exchanges engendered.
Steadily increasing enrollment numbers have done much to change the the narrative of the health care reform’s success. But the battle for public opinion is hardly concluded, almost as important as the number of people who have signed up through the exchanges is whether those enrollees are finding the premiums to be affordable and the coverage to be good. Still, the administration has also had to accept and apportion blame for the federal health care website’s inability to stand up to actual, real-time usage. That part of the battle for public opinion included President Barack Obama calling the exchange debut one of his “fumbles,” Health and Human Services Secretary Kathleen Sebelius describing it as a “debacle,” relaunching healthcare.gov on December 1 after a mad scramble to fix the website, and replacing CGI Federal.
On October 1, it was not immediately obvious how serious the website’s problems were. Three years in the making, the federal exchanges — just like the 14 state-run exchanges — were meant to allow consumers to comparison-shop for health insurance policies in online marketplaces, which were designed to give individual customers collective bargaining power, fostering competition and driving down prices. Shopping for those insurance policies were meant to be as easy to use as Amazon.com. The administration was so confident that the marketplaces would be success, Department of Health and Human Services Secretary Kathleen Sebelius said on the eve of the launch: “we’re about to make some history.”
Yet, while Obama was telling the public that “interest way exceeded expectations,” privately, White House officials were wondering whether the website needed to be taken down for it to be fixed. But eventually it was decided that the website should remain functioning so that problems could be identified. Website crashes continued throughout the month, and more problems materialized; its data center had inadequate capacity and computer code was poorly written because contractors were pressured to rapidly adjust to changing government specifications. Many of these problems had not been uncovered because the website had barely been tested before October 1. Finally, at the start of December, administration officials said the the website was largely working for those consumers enrolling in health plans.
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