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Obamacare Small Business Delay Kept From Public for Weeks

The decision to delay the Obamacare health exchange for small businesses was withheld from the public for at least six weeks, according to internal e-mails released by a congressional committee investigating the rollout.

CGI Group Inc., responsible for getting the insurance shopping site for small business open Oct. 1, told the Obama administration in August the marketplace wouldn’t be completely ready until at least Nov. 15, according to documents released today by Republicans on the House Energy and Commerce Committee.

The administration was still saying publicly as late as Sept. 26 that the Small Business Health Options Program was on schedule. A news release that day by the Department of Health and Human Services said the SHOP exchange would open Oct. 1.

“We see more and more evidence that the administration was fully aware its signature health care law was not ready for prime time,” Representative Fred Upton, the committee chairman and a Michigan Republican, said in a statement.

CGI workers on Aug. 13 told Henry Chao, the deputy chief information officer for the Centers for Medicare & Medicaid Services responsible for construction of the exchanges, that the small business site wouldn’t be ready by Oct. 1 and offered an extended timetable to get the exchange running by Nov. 15, according to the e-mails. “Can we sign this with blood?” Chao responded. Martin Rich, a CGI executive, agreed to the delayed dates in a follow-up e-mail.

Mounting Delays

The administration later delayed the exchange again, saying Nov. 27 that small businesses won’t be able to use the federal government’s website to buy health insurance until November 2014 in most U.S. states, and would instead have to enroll in plans through brokers or directly with insurers.

Patti Unruh, a CMS spokeswoman, disagreed with the Republican characterization, saying the e-mails reflected “one piece of many conversations” about the progress of the small-business exchange.

Related: Republicans Change Obamacare Attacks as Website Functions

“The final decision to delay SHOP enrollment functions was not made until mid-September, and CMS announced the delay once we had complete information about what functionality would be available for small business owners on Oct. 1,” she said in an e-mail.

Health and Human Services Secretary Kathleen Sebelius is scheduled to testify before a panel of Upton’s committee on Dec. 11.

Technical Flaws

The health insurance websites, for consumers, businesses and Spanish-speakers, have been plagued by delays and technical problems that have slowed the introduction of the signature part of President Barack Obama’s health-care law -- the ability for people to shop for new health insurance coverage. The consumer site recently underwent a series of technical fixes. More people signed up in the first two days of December, the administration said, than in all of October.

The exchange for small businesses, available for companies with 50 or fewer full-time workers, were something of an afterthought when Congress passed the Patient Protection and Affordable Care Act in 2010. The administration said April 1 that workers at these companies won’t immediately be able to pick any health plan they want as the law intended, and instead will have to sign up for a plan selected by their employers.

To contact the reporter on this story: Drew Armstrong in New York at darmstrong17@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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