The main contractor hired to build Maryland’s health care exchange website will repay the state in a $45 million settlement, officials announced Tuesday.
Noridian Healthcare Solutions agreed to pay $20 million upfront, according to Shareese Churchill, spokeswoman for the Office of the Governor, with an additional $5 million annually for five years. The payments represent a 61 percent recovery of the total amount paid to Noridian since the website’s launch in 2013, Churchill 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,” Attorney General Brian Frosh said. “This settlement sends a message that the performance was unacceptable, and that those responsible will be held accountable.”
As previously reported in The Sentinel, the online marketplace, Maryland Health Benefit Exchange, launched in connection with the Affordable Care Act’s required health coverage, thus allowing residents to shop for health insurance plans and apply for financial assistance with premiums. However, technological problems and website crashes caused users delays and frustration.
Gov. Larry Hogan said this settlement is the first step in the process to make up for financial damages.
“The roll-out of Maryland’s Health Exchange was a debacle that could have been avoided,” Hogan said in a statement. “I have been one of the most vocal critics of this fiasco, and I am pleased that the process of recouping taxpayer losses has begun.”
The agreement is subject to regulatory approvals by the Office of the Attorney General and is the first step to recover funds for the state and the Centers for Medicare and Medicaid Service, which provided significant funding to develop the website.
Frosh said this deal is fair for Maryland taxpayers because of limitations on the company’s finances. Noridian’s parent company, Noridian Mutual Insurance Co., based in Fargo, North Dakota, agreed to guarantee at least $40 million of the payments, according to a statement from the Office of the Governor.
“Our state’s failure to manage this rollout – which cost our taxpayers tens of millions of dollars and prevented thousands of Marylanders from obtaining health insurance – was a painful lesson in government mismanagement and a national embarrassment,” Congressman John Delaney said.
This settlement also releases the state of Maryland from all contractual obligations with Noridian, said Frosh, whose office is investigating claims against other companies involved in the building of the exchange.
Carolyn Quattrocki, executive director of MHBE, said she was “very pleased to see the taxpayers recover the money spent on a system that didn’t work.”