May 6 (Bloomberg) -- Massachusetts’ first-in-the-nation insurance exchange, which broke when the state changed it to comply with Obamacare, will be revamped or closed in favor of the U.S. enrollment system, officials said.
The state plans to pursue two options: building a new exchange using “off-the-shelf” technology, or joining the federal insurance marketplace, healthcare.gov. A final decision will be made this summer, Sarah Iselin, who oversees the exchange for Governor Deval Patrick, a Democrat, said in a phone interview. Massachusetts is the third state exchange to consider joining the federal system, after Oregon and Maryland.
“Each of them has different risks and different challenges,” Iselin said. Joining the federal system for 2015 would be “a one-open-enrollment-period solution only,” she said.
Massachusetts created its exchange, called the Connector, under a 2006 health overhaul that was a model for the 2010 Patient Protection and Affordable Care Act, known as Obamacare. Death rates in the state fell 3 percent in the four years after Massachusetts expanded health insurance coverage under the reform, according to a study released yesterday by Harvard University School of Public Health researchers.
Fourteen states and the District of Columbia chose to build their own insurance enrollment exchanges under Obamacare while the federal government’s site served as the marketplace for the rest of the nation. The Connector failed in October after upgrades to comply with the national law by CGI Group Inc., which also built the faulty federal exchange.
While repairs to healthcare.gov were successful, the Connector never enrolled people online for 2014 coverage. Patrick’s administration requested $50 million in additional funding from the federal government in March for the Connector, and plans to buy technology from hCentive Inc., a Reston, Virginia-based company with products that are used by functional exchanges in Colorado and Kentucky, Iselin said.
The federal government gave Massachusetts $180 million in grants to upgrade the Connector, according to the Kaiser Family Foundation, a Menlo Park, California-based nonprofit group that has tracked implementation of the health law.
Massachusetts signed up 304,000 people for new insurance coverage during the Affordable Care Act’s six-month enrollment period, Patrick’s office said in a statement. The state relied on work-arounds including temporarily placing tens of thousands of customers into its Medicaid program.
Iselin said federal officials haven’t yet decided whether Massachusetts will get the extra money it has requested.
Officials in Maryland, whose exchange also failed, have asked for $45 million to buy replacement technology for their system to try to fix their system. Oregon, another state with a failed exchange, will join the federal system next year.
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--With assistance from Nicole Ostrow in New York.