By Gintautas Dumcius
State House News Service
BOSTON -- The Massachusetts Connector Board voted 10-1 Thursday to approve a plan to fix its broken health-insurance signup site. The plan calls for the authority to hire a new vendor to build a workable site, with the federal health exchange serving as a backup in case the vendor's site is not satisfactory.
The timeline calls for both sites to be up and running in the fall, in time for the next open-enrollment period in November.
Sarah Iselin, who was tapped by Gov. Deval Patrick to oversee the overhaul of the signup site, led a two-hour presentation to board members, laying out the plan. State officials have ruled out other options, such as using technology deployed in states like Connecticut and Rhode Island.
"Putting all the eggs in one basket" is too high-risk, she said. "The reality is, this is it," she added.
The cost estimate for the dual-track plan is $121.1 million, and officials are working to determine how much will be funded by federal officials, Iselin said.
Much of the money -- $55.9 million -- is slated to go toward hCentive, a Virginia firm that has helped with similar websites in Kentucky and Colorado. The cost estimate assumes a steady state of 307,000 enrollees.
Iselin, who is returning to her private-sector post at Blue Cross Blue Shield in early June, cautioned that the cost estimate was based on "best, reasonable guesses." "There are still things we don't know," she said.
State officials are seeking to disentangle themselves from CGI, the contractor behind the current, troubled health-care site that has frustrated scores of individuals trying to sign up for insurance.
Jean Yang, the Connector Authority's executive director, said the two-pronged strategy to fix the site is "incredibly complex and aggressive." "We are dying to work. We are literally in a race right now," she said.
One board member, the lone "no" vote, George Gonser, said he was concerned about what happens if the federal funding doesn't materialize, and the potential impact on health carriers and small businesses in the aftermath.
"I'm not against the idea of a dual track," said Gonser, CEO of Spring Insurance Group LLC, after the vote. "There's too many loose ends on this in a short amount of time."
Other board members were more hopeful. "This is a plan that provides some insurance," said Jonathan Gruber, an economist at the Massachusetts Institute of Technology.
The board was not required to vote since the Connector Authority doesn't hold the contract with Optum, which has a license agreement with hCentive; the state's Information Technology Division is in charge of the contract. But Dolores Mitchell, executive director of the Group Insurance Commission and an ex-officio member of the Connector Board, pushed for a vote on the dual-track, saying it was "appropriate" for the board to do so.
Board member Celia Wcislo, assistant division director and vice president at-large at SEIU 1199, said she agreed. She echoed Gov. Patrick's coolness toward joining the federal exchange, formally called the "Federally Facilitated Marketplace." "I hope to God we don't end up with that track," she said.
In a May 7 letter to the Connector Board, a top official at the Massachusetts Association of Health Plans (MAHP) voiced "serious concerns" about the dual-track strategy and asked them to delay proceeding in favor of the strategy.
"In particular, we are concerned about the significant challenges to implement two separate systems and the potential disruption to consumers in health plans that are unable to meet the technical specifications, the lack of transparency and level of due diligence in determining the proposed approach, the impact the dual-approach will have on premiums for individuals and small businesses, and the Connector's legal authority should it determine it will move to the Federally Facilitated Marketplace," Eric Linzer, senior vice president for public affairs and operations at MAHP, wrote in the letter.
The association has tapped the law firm Foley Hoag to determine whether the Connector Authority is legally able to move the state into the federal health exchange, Linzer wrote.
Linzer noted that the state's health plans "heavily invested" in new information technology systems to support past open enrollment periods, though they were not told of the website's issues until late November 2013. Some of the plans may not be able to participate in the Connector due to technical requirements, the timeframe and additional costs caused by dealing with two systems, he added.
The association's concerns were not raised for discussion during the board's meeting Thursday.
During her presentation, Iselin said the federal exchange is up and working in more than 30 states, but acknowledged it's not designed to support the unique health-care marketplace in Massachusetts. It also doesn't collect premiums on behalf of health plans like the Health Connector does, and it could make health care less affordable for Massachusetts residents, she said.
Before the vote, a few board members voiced concern about a Boston Globe editorial on Thursday, which noted Optum has a 24 percent ownership stake in hCentive. "There seems to be a conflict there," said Ian Duncan, president of Solucia Inc., a consulting firm.
Iselin said Optum disclosed the ownership stake "right off the bat," though state officials were already familiar with hCentive through a competitive procurement process two years ago, which determined that hCentive wasn't the best fit at the time.
Iselin told board members she was comfortable there was no conflict.
"Often conflicts are cured by transparency," she said, leading Duncan to respond, "I learned about it this morning from the Boston Globe."
Other board members said they were aware of the stake. During a press conference after the board's vote, Iselin apologized, saying they had disclosed it in briefings with some board members, but some did not receive the information.
Republican gubernatorial candidate Charlie Baker, a former health-insurance executive, issued a statement saying it was "extremely disappointing" that Gov. Patrick and Attorney General Martha Coakley, a Democrat running for governor, did not urge their appointees to reject joining the federal exchange. "As a result of Coakley and Patrick's inaction and lack of leadership, the Connector's actions today drastically curtailed our ability to chart our own course and continue the delivery of high quality care to the people," Baker said.
The state director for the National Federation of Independent Business, Bill Vernon, called on the state's congressional delegation to push the federal government to pay the cost of rebuilding the site. "The federal government created this disaster and they should clean it up," he said.
Vernon added: "We paid more than a hundred million dollars to build a website that doesn't work and now we have to spend at least another $121 million to replace it. Our health insurance system, though not perfect, was working fine until most of our congressional delegation voted with a bare majority to impose this new system on Massachusetts."
Health Care For All, a consumer advocacy group, supported the Connector's move. "While the federal healthcare.gov option should be kept as a fallback, the state would best be served by a website that supports state affordability standards and allows access to all state-specific coverage programs," Amy Whitcomb Slemmer, the group's executive director, said in a statement.