Maryland to Abandon $125 Million Health Insurance Marketplace

Open enrollment into ObamaCare is scheduled to end today, March 31.  However, for at least one state, March 31 may mark the last day when they continue to develop their health insurance marketplace.

When the Patient Protection and Affordable Care Act was signed into law in March 2010, it called for each state to provide a health insurance exchange website by October 1, 2013, when open enrollment into health insurance under ObamaCare would begin.  Each state had the option to create its own health exchange website, develop an exchange website in partnership with the federal government, or use the exchange website provided by the federal government.

Maryland is one of fifteen states that opted to develop its own health exchange website.  To that end, the state has spent over $125 million in taxpayer funds.

All health exchange marketplaces were to be fully operational by January 1, 2014.  However, Maryland, like many other states, has encountered significant challenges in developing its health exchange website.  Although residents of Maryland can enroll in insurance through the website, they have experienced a myriad of difficulties.

“We still have stuck applications.  We still wrestle with it every day,” said Maryland Governor Martin O’Malley.  “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 still is] not working as it was supposed to work.”

In fact, the problems with Maryland’s exchange marketplace are so significant, the board responsible for development of the marketplace is expected to vote on April 1 to abandon their website.  Maryland will instead move to develop a new exchange website using the technology running Connecticut’s exchange marketplace, which is one of the few in the nation deemed a success.

Maryland will use to Deloitte to develop their new site.  Deloitte was responsible for development of Connecticut’s health exchange website.  The decision comes after Maryland’s health exchange board voted in February to fire Noridian Healthcare Solutions, the contractor responsible for development of their web site.

New Maryland Health Exchange Marketplace Targeted for November 15

Although the Maryland health exchange board stated their goal is to have a new website functional before open enrollment begins on November 15, 2014, the board has not released estimates of the costs to develop the new exchange website.  However, taxpayers can expect the cost will run into the tens of millions of dollars at a minimum.

In addition to costs to develop the new exchange website, Maryland taxpayers will have to spend over $30 million to determine which enrollees are eligible for Medicaid.  A report provided to the board in February found that the existing exchange website cannot provide that information.

Until the overhaul of Maryland’s exchange website is complete, residents can continue to sign up for health insurance through Maryland’s existing exchange.  To date, approximately 50,000 Maryland residents have signed up for insurance through the state’s exchange website.  That number is only one third of the number of residents the state hoped to enroll when development of the exchange website began.  However, the number of those 50,000 individuals who did not have health insurance before ObamaCare was not provided.

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by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.