Nov. 12, 2014: In this file photo, the HealthCare.gov website, where people can buy health insurance, is displayed on a laptop screen. (AP Photo/Don Ryan)
The failure of Maryland’s health exchange website became a talking point of American politics—both nationally and statewide—since its roll out in 2013. In fact, it was one of the more effective weapons used against former Lt. Gov. Anthony Brown, the state’s point man for Obamacare’s implementation, in his run for the governor’s seat last year.
This week, Maryland Attorney General Brian E. Frosh announced a settlement for damages caused by the technological disaster. Noridian Healthcare Solutions LLC, the prime contractor responsible for building the flawed website, will pay $45 million to avoid legal action, Frosh said.
“This company never delivered on what it promised, and, as a result, tens of millions of taxpayer dollars were wasted, and thousands of Marylanders suffered delays and frustration,” Frosh said in a statement. “This settlement sends a message that the performance was unacceptable, and that those responsible will be held accountable.”
Noridian’s payment represents a recovery of 61 percent of the contract it was awarded for the health exchange’s development. The company has agreed to pay $20 million upfront, and an additional $25 million in annual installments of $5 million over five years. Its parent company will guarantee at least $40 million of the settlement, and the state is released from all contractual obligations with Noridian.
Frosh said the deal was fair to taxpayers because they were able to at least recoup a majority of the payout from Noridian, which has limited funds.
“Given constraints on the company’s finances, it is doubtful that Maryland could have collected this amount from Noridian Healthcare even if it obtained an equal or higher judgment after years of litigation,” Frosh said.
The agreement still requires regulatory approval. The recovered funds will go to Maryland and the federal Centers for Medicare and Medicaid Services, which provided an estimated $163 million to develop the health exchange.
Investigations into potential claims against other companies involved in the development and implementation of Maryland’s exchange are ongoing.