Maryland to Abandon $157 million Obamacare Exchange Site

Maryland has had nothing but trouble with its Obamacare exchange site since it went live last October 1. Only 49,000 people have been able to endure the excruciating process to sign up for insurance — about 1/3 the total they were shooting for.


The site has been plagued with technical and human problems — shockingly bad management as well as the software glitches and poor design that’s been blamed on the contractor, Noridian Healthcare Solutions. The HHS Inspector General’s office is looking into those issues as well as the Medicaid enrollment process that may be giving the green light to people who aren’t eligible.

It appears now that Maryland officials are throwing in the towel and are going to scrap the site entirely, replacing it with one similar to the more successful Connecticut exchange.

Gone forever — $157 million in taxpayer funds. One might consider sending the culprits to jail except there’s no law in the US against public incompetence and stupidity.

The Washington Post reports:

Marylanders will be able to use the exchange even as it is being overhauled. The first enrollment period opened Oct. 1 and closes Monday for insurance coverage that kicks in this year. A second open enrollment period starts Nov. 15.

Like Maryland, Connecticut was one of the first and most enthusiastic states to embrace the idea of building its own insurance exchange rather than using a federal site to implement the law’s sweeping changes in health-care coverage.

But unlike Maryland, where the system crashed within moments of launching and has limped along ever since, Connecticut’s exchange has worked as smoothly as any in the country.

Maryland is not alone in having deep-seated problems with its health marketplace. Technical issues also have plagued Oregon, Minnesota and Hawaii. But Maryland will be the first to walk away from its site, a particular embarrassment for Lt. Gov. Anthony G. Brown (D), who was placed in charged of implementing health-care reform in Maryland by Gov. Martin O’Malley (D).

It was not immediately clear how much more money Maryland may have to invest to get a fully functioning system, according to the two individuals, who spoke on the condition of anonymity because they were not authorized to discuss the changes.

The money the state has already spent has gone toward development and operation of the Web site and for agency operating costs. The existing Maryland system will stay operational for “a period of time” while the Connecticut version is being installed, one of the individuals said.

O’Malley told reporters Friday morning to expect an announcement on the future of the troubled exchange next week. The exchange board is scheduled to meet at 5 p.m. Tuesday.

“We still have stuck applications. We still wrestle with it every day,” O’Malley said at a news conference. “The clock was ticking, and we have been changing the flat tires on this rolling car for the last five, going on six months now. And it has gotten better with every new fix applied to it, [but it is] still not working as it was supposed to work.”


As bad as Maryland’s problems are, no state tops Oregon for sheer mismanagement and incompetence in their state insurance exchange. Not one, single Oregonian has been able to sign up online using the Cover Oregon site. More than $300 million has been earmarked for the project, of which $190 million has already been spent. An investigation has begun by the General Accountability Office into where that money went and how the project was so brutally mismanaged.

The problems don’t stop there. One state legislator is alleging a cover up by some Cover Oregon officials who may have lied to Congress and falsified documents in order to keep the federal dollars flowing.

Oregon Governor John Kitzhaber authorized an independent review by Atlanta-based First Data Government Solutions and what they discovered suggests that some Cover Oregon officials had no business running a mommy blog much less an enormously complex project:

Among First Data’s findings:

  • Cover Oregon was a complex, multi-agency project, with “no single point of authority.”
  • The governance structure “was not effective at the project level,” with competing priorities and conflict between agencies.
  • The project lacked a “consistent, cohesive enterprise approach” and “lack of authoritative direction.”
  • Communication and transparency also were lacking, slowing the decision making process: “communication and collaboration across agencies was limited at best.”
  • Oracle’s continued reassurances led Cover Oregon to believe the October rollout was achievable and the agency “continued to reassure the state.”
  • The project did not have a “holistic plan B to address contingencies if the website was not going to be available” because staff did not consider that the website wouldn’t be operational for months.

The inspector general is going to be busy. In addition to Maryland ($157 million) and Oregon ($303 million), several  other states are experiencing massive problems with their exchange sites. Hawaii ($205 million), Vermont ($165 million), Massachusetts ($135 million), Nevada ($83 million), and Minnesota ($153 million) have seen varying degrees of incompetence and poor performance that has necessitated massive overhauls and scrutiny from the Feds. Not all of these sites are likely to be abandoned, but this course of action is actively being considered in several of  them.

There is no law against wasting taxpayer money. Perhaps there should be when the level of incompetence and mismanagement reaches these proportions. This is a special kind of corruption — a crime of hubris and stupidity. Perhaps it deserves a special kind punishment to go with it.

In early America, colonists used the stocks to shame and punish people for petty crimes. Perhaps we could round up the lot of them — including officials at HHS who designed and built — and set up several dozen stocks on the Washington Mall and invite the public to pay them a visit to jeer at them and throw rotten fruit at their heads. It certainly would be gratifying for the public, and who knows? Maybe the bureaucrats will learn their lesson.





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