Fixing the Obamacare website to get it ready to handle a second round of enrollments will cost the federal government $121 million, according to Accenture, the contractor hired to repair the glitchy website after the original contractor, CGI Federal, was fired in January.
The deal, which Accenture announced on its website Tuesday, costs more than the initial, $93.7 million award CGI Federal received in 2011 to build HealthCare.gov, although the Montreal-based company ultimately received millions more for the project, far exceeding the new vendor’s contract.
The Accenture deal is also $30 million more than the government projected for fixes just a few months ago, when it called in Accenture on an emergency basis to try to keep President Obama’s signature domestic law on track.
“There doesn’t seem to be a light at the end of the tunnel for Obamacare website expenses,” said House Oversight and Government Reform Committee Chairman Darrell E. Issa, California Republican. “Developers are still being brought in to finish building HealthCare.gov, some states are abandoning their own failed sites, and federal taxpayers are still being handed the bills for it all.”
Accenture Federal Services said the contract covers the initial repair work and building new features, such as “enhancing the back-end capabilities to improve issuer payments.”
That announcement is likely to add fuel to concerns that the “back-office” functions of the exchanges are still glitchy. The automated system is designed to pay the issuers the appropriate tax credits and cost-sharing reductions. Right now, the government has an interim process to calculate and make payments to issuers on time, which does not impact consumers.
“This thing just stinks from top to bottom,” said Rep. Michael C. Burgess, Texas Republican and a frequent critic of Obamacare. He said the added costs lend weight to Republican argument that the Obamacare system was flawed from the start.
He predicted that voters in November will remember the glitches, cost overruns and health insurance policies canceled because of the law’s strict standards.
Officials at the Centers for Medicare and Medicaid Services, the agency that oversees the HealthCare.gov website, said the new contract requirements include functions that were not included in the initial launch.
The Centers for Medicare and Medicaid Services this year set aside $45 million in upfront payments to repair the website and reserved an additional $45 million to cover other anticipated costs. But Tuesday’s deal, valued at $31 million more than those two numbers combined, is based on an informed review of the federal exchange and its needs, officials said.
“As CMS moves forward in our efforts to help consumers access quality, affordable health coverage, we have finalized a one-year agreement begun in January with Accenture to continue their work on Healthcare.gov,” spokesman Aaron Albright said in a statement. “We are pleased that more than 8 million consumers have enrolled in a private plan through the federal Marketplace and look forward to continuing to work with Accenture to prepare for the next open enrollment period.”
CGI declined to comment on the Accenture contract.
“It’s common to see IT projects over-run budgets in the Federal Government. In this case, though, Accenture’s asset might be a White House liability,” said Dan Mendelson, CEO of Avalere Health, a Washington-based consultancy. “The costs of all of these web sites is definitely adding up, especially if you include some of the state efforts that haven’t worked out.”
The federal exchange and various state-run portals experienced widespread glitches when they launched in October, threatening to kill Mr. Obama’s health care overhaul in its infancy.
A technology surge helped fix many of the problems with the federal exchange by December, but several state exchanges are still dealing with website problems.
Even with the glitches, more than 8 million Americans signed up for plans on the exchanges, which was higher than the initial target of 7 million.
Still unclear, however, is how many of those who enrolled are paying their premiums, or how many of them are truly new customers. Republicans argue that a large percentage are individuals who had insurance but lost coverage under other parts of Obamacare.
Health and Human Services Secretary Kathleen Sebelius, who had assured Capitol Hill that Obamacare would be ready on time, announced her resignation this month.
Mr. Obama has tapped his budget director, Sylvia Burwell, to replace Ms. Sebelius at the top of the department.
But a handful of House Republicans wrote Tuesday to ask senators to delay Ms. Burwell’s nomination, saying she should be used as leverage to try to extract a delay of more Obamacare provisions.
Republicans in Louisiana’s House delegation wrote a letter asking their senators to place a “hold” on the Burwell nomination until Mr. Obama agrees to halt the individual mandate that would impose a penalty on most Americans who fail to obtain health care coverage.
“It is wholly unfair for these families to still be threatened with penalties from the IRS while the administration has unilaterally delayed or changed the law at least 20 times to grant relief to others,” the Republicans said.