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ACA Data Center Sees 328 Percent Cost Overrun

ACA Data Center Sees 328 Percent Cost Overrun

House Passes Legislation to Combat ACA Tax Fraud


(Washington, D.C.) – According to data published by the Department of Health and Human Services, the cost of the computer cloud that stores cost, coverage, and performance data for insurance plans sold under the Affordable Care Act (also called the ACA or Obamacare) has more than tripled since the contract was originally awarded in 2011. Press reports indicate that the Centers for Medicare and Medicaid Services (CMS) awarded a $10.8 million contract to Terremark – a subsidiary of Verizon – early in 2011. The contract called for the company to design a system to help consumers find an insurance plan and transfer it to CMS' computer cloud, among other duties. This week CMS announced the contract is now for $35.5 million – more than triple the original amount.

This week by a bipartisan vote of 235-191, the House passed H.R. 2775, which conditions the receipt of cost-sharing subsidies under the Affordable Care Act upon a certification that a program to verify household income is in place. 

Jorge Lima, Policy Director of The LIBRE Initiative released the following statement:

"This measure by the House is needed because the Administration has determined that it's not feasible right now to use employer data to verify that people are eligible for the subsidies they are claiming. If not addressed, this could cost taxpayers billions next year in fraud.

Enrollment under the ACA is scheduled to begin in less than three weeks, but consumers have little information about cost and coverage options, or even about simple concerns such as whether they will be able to keep their current doctors. It's not clear whether consumers will be safe from identity theft when they provide personal information online. Premiums are costing more than before the law was passed, instead of less – as was promised. The current shortage of medical professionals is likely to get worse, rather than better. The law is simply not ready to go into full effect – as even the AFL-CIO now recognizes. It is time to repeal this law, and instead work in a bipartisan way toward real patient-centered reform." 

For interviews with a LIBRE representative, please contact: Judy Pino, 202-578-6424 or Brian Faughnan, 571-257-3309.