Cost of Running Obamacare Data Site Has Tripled Since 2011

The cost to run a computer cloud that manages some technical requirements of President Obama’s landmark health care reform act has tripled to more than $35 million since the contract was first awarded in 2011, documents show.

The computer cloud stores the cost, coverage and performance data for insurance plans nationwide that power Healthcare.gov’s Plan Finder application. The application is designed for small businesses and individual consumers to compare health insurance options in their areas and for researchers to spot trends and irregularities in the health insurance marketplace.

Plan Finder data will also be used by state health insurance exchanges. The Centers for Medicare and Medicaid Services’ Center for Consumer Information and Insurance Oversight, which runs the website, is also hoping private sector developers will use the system to build new applications that serve consumers and businesses.

CMS awarded a $10.8 million contract to Verizon’s cloud computing division Terremark in April 2011 to design Plan Finder and move it from a pair of contractor-operated data centers in New Jersey and Arizona to CMS’ computer cloud, among other duties.

After seven modifications, the three-year base contract cost had grown to $35.5 million, according to documents posted Wednesday to justify purchasing an additional $110,000 in goods from Terremark that are outside the scope of the original contract but necessary to make the system run effectively.

Computer clouds are essentially massive data centers that can pack information more cheaply and efficiently than traditional data centers and make it remotely accessible over the Internet. The award was made off the General Services Administration Schedule, a list of pre-approved government contractors for certain goods and services.

“This effort has experienced a significant degree of change after award,” CMS said. “At the time of the contract award, the scope of cloud computing needs to support the implementation of insurance exchanges was unknown.”

The White House announced on Wednesday that another major computer system undergirding the Affordable Care Act, popularly known as Obamacare, is up and running. The health care “data hub” will verify citizens’ social security numbers, immigration status and other information when they buy health insurance through state government websites or apply for government subsidies. Open enrollment in plans offered through those state exchanges begins in October, and Americans will be required to own health care or pay a penalty in 2014.

A Government Accountability Office report in April raised concerns the data hub would not be ready on time. Administration officials told members of a House Homeland Security panel on Wednesday that the hub is secure from hackers and data leaks, despite skepticism from some Republican committee members.   

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