November 13, 2015: This article has been updated.
Maryland’s health care insurance exchange was supposed to be a leading example of a successful, state-supported program to ensure every resident had access to health care. Maryland already had established an all-payer system setting uniform rates for medical procedures, so embracing universal health insurance as part of the Affordable Care Act, or “Obamacare,” was the logical next step. And Gov. Martin O’Malley, a Democrat, soon to seek the presidency, was eager to get the program launched.
But the Maryland exchange stumbled badly almost the minute it opened for business in 2013, felled by technology, not medical science. A series of computer glitches paralyzed the system and took months to resolve. Some of the contracts for the failed 2013 rollout had been awarded without competitive bidding, a move allowed by changes approved in 2011 by the state Legislature with little fanfare.
That meant more than $1 million in contracts for the health care exchange could go ahead without customary review by the state’s Board of Public Works, composed of the governor, the independently elected state comptroller, and the state treasurer appointed by the Legislature. Comptroller Peter Franchot, a Democrat, was a lone voice on the board when he questioned the new contracting system for the health care exchange.
In addition, a state audit of Maryland’s health insurance exchange found that the state improperly billed the federal government $28.4 million during the troubled launch. The audit report attributed the overbilling to a lack of state oversight and internal controls.
After the initial problems with the exchange, the Maryland Health Benefit Exchange Board of Trustees, which oversaw the process, extended contracts and awarded new ones in closed-door meetings that the Maryland Open Meetings Compliance Board later said were violations of state law.
Maryland’s disastrous health exchange rollout combined two elements — procurement problems and lack of transparency — that are among several recurring themes that led to the state earning a score of 64, or a D grade, ranking it tied for 22nd among the 50 states in the State Integrity Investigation, a data-driven assessment of state government accountability and transparency by the Center for Public Integrity and Global Integrity.