Massachusetts Dismantles Health Insurance Exchange

Injured Piggy Bank WIth Crutches

Massachusetts is scrapping its troubled health insurance exchange in favour of installing software other states are using to run their own exchange. In the interim period the state will join the federal exchange at The switch is expected to cost the state an additional $100 million.

The exchange – Mass Health Connector is a separate and buggy exchange created to bring the state into compliance with the Affordable Care Act (ACA) even though Massachusetts already had a well-functioning and very similar health insurance marketplace. The dysfunctional current exchange was deemed too risky to try and fix after attempts still failed and the state was running the risk of missing the next health insurance deadline for individuals who want coverage in 2015.
The change may also mean that some people who already have insurance will have to switch providers and sign up again if some local insurers can no longer afford to stay in the program.

CivSource previously reported on the state’s decision to drop CGI which was the initial contractor on the exchange after its failure to perform. CGI was also dropped by the federal government after the buggy rollout of the federal exchange.
Massachusetts is the second state that has had to scrap its insurance exchange this far into ACA implementation. Oregon is also abandoning its exchange after a long and rocky path with Oracle failed to produce a working website. Notably the technology currently powering Oregon’s exchange will live on and be absorbed by another part of the state’s health apparatus.

Both states have spent hundreds of millions of dollars on their insurance exchanges, with little in the way of functionality or accountability to show for it. Massachusetts is looking at a solution offered from hCentive which built exchanges in Colorado, Kentucky and New York. Kentucky has been one of the few real success stories of ACA in terms of sign up and service delivery.

Massachusetts plans to shift all residents who are still looking for insurance over to until hCentive can complete its work on the new exchange which may still miss the next deadline for coverage in 2015.