RPT-INSIGHT-As Obamacare tech woes mounted, contractor payments soared

Thu Oct 17, 2013 6:59am EDT
 
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(Repeats to widen distribution)

By Sharon Begley

NEW YORK Oct 17 (Reuters) - As U.S. officials warned that the technology behind Obamacare might not be ready to launch on Oct. 1, the administration was pouring tens of millions of dollars more than it had planned into the federal website meant to enroll Americans in the biggest new social program since the 1960s.

A Reuters review of government documents shows that the contract to build the federal Healthcare.gov online insurance website - key to President Barack Obama's signature healthcare reform - tripled in potential total value to nearly $292 million as new money was assigned to the work beginning in April this year.

The increase coincided with warnings from federal and state officials that the information technology underlying the online marketplaces, or exchanges, where people could buy Obamacare health insurance was in trouble.

In March, Henry Chao, deputy chief information officer at the lead Obamacare agency, said at an insurance-industry meeting that he was "pretty nervous" about the exchanges being ready by Oct. 1, adding, "let's just make sure it's not a third-world experience." At the same event, his colleague Gary Cohen said, "Everyone recognizes that day one will not be perfect."

The contract to build Healthcare.gov, issued to the CGI Federal unit of Montreal-based CGI Group, has come under scrutiny after the site, offering new subsidized health insurance in 36 states, stalled within minutes of its Oct. 1 launch, leaving millions of Americans unable to create accounts or shop for plans.

In its third week of operations, the website continues to experience problems, which government officials say they are working day and night to repair. Even allies of the Obama administration have been highly critical, with former White House press secretary Robert Gibbs calling it "excruciatingly embarrassing" and calling for "some people" to be fired.

How and why the system failed, and how long it will take to fix, remains unclear. But evidence of a last-minute surge in spending suggests the needs of the project were growing well beyond the initial expectations of the contractor and the U.S. Department of Health and Human Services.   Continued...