New Documents Reveal Administration Knew In August Small Business Exchange Would Not Be Ready

December 6, 2013

WASHINGTON, DC – The House Energy and Commerce Committee investigation of the health care law’s failures has uncovered new documents that reveal the administration was aware of the need to delay the online small business (SHOP) exchanges as early as August. Despite this knowledge, the Obama administration waited to finalize the delay until November 27, as Americans across the country were off celebrating Thanksgiving with their loved ones.

The emails reveal conversations among officials at the Centers for Medicare and Medicaid Services and the contractor, CGI Federal, between July 26, 2013, and August 13, 2013. The administration agreed on August 13 that SHOP online would be delayed until November 15, but the administration did not announce any delay until September 26, less than a week before employers were expecting to begin going online to shop for health care coverage for their employees. At that time, the administration said, “The SHOP Marketplace for Federally-facilitated Marketplace states opens Oct. 1, 2013, when small employers can start the application process and get an overview of available plans and premiums in their area. All functions for SHOP will be available in November and if employers and employees enroll by Dec. 15, 2013, coverage will begin Jan. 1, 2014.”

Just last week, as Americans all across the country were traveling for Thanksgiving, the administration announced a one-year delay of the SHOP online enrollment feature.

“As the paper trail broadens, we see more and more evidence that the administration was fully aware its signature health care law was not ready for prime time,” said Chairman Fred Upton (R-MI). “The documents we are now reviewing tell a much, much different story than what officials testified to Congress. While it’s not clear if any ‘blood oath’ was taken, the president’s top lieutenants repeatedly looked us in the eye, insisting that they were ‘on track’ when they knew looming deadlines would be impossible to meet. These are not the characteristics of the ‘most transparent administration in history.’ Secretary Sebelius must come prepared next week to provide answers about what January 1 and beyond will really look like. The American people deserve better, they deserve an administration that keeps its promises, and they deserve a reprieve from the president’s failed health care law.”

“As President Obama embarks on his latest PR push to try and salvage his signature legislation, we’re finding more evidence that the administration was painfully aware the work would not be complete by October 1,” said Oversight and Investigations Subcommittee Chairman Tim Murphy (R-PA).

Key findings from the documents follow (emphasis added):

Jo-Ann Webber at CMS Office of Information Services emailed on July 26, “I’ve escalated your concerns regarding the SHOP Employee application not being completed until 10/15/13, and the concern that the Employer application development will not be completed until 8/30/13; whereby the Employer will be able to enter the application, get eligibility, shop for a plan, but cannot move through the entire application process because the Employee Application Development will not be completed until 10/15/13.”

Dean Mohs at CMS Center for Consumer Information and Insurance Oversight immediately responded, “I am not recommending a delay of the employer application.” Going on to say, “I will also note that Chiquita testified yesterday to the Senate Small Business Committee and committed on more than one occasion that the FF-SHOP will go live on 10-1-13.”

NOTE: Chiquita Brooks-Lasure is the Deputy Center and Policy Director for CMS Center for Consumer Information and Insurance Oversight.

In the same email communication, on August 6, Monique Outerbridge, Director of CMS Office of Information Services, emailed CMS and CGI officials stressing, “Guys, this is absolutely urgent and I need an answer on this today. If this is late we have to public announce we are late with a deliverable which means Marilyn Tavenner and the Secretary will have to announce.”

In a separate email one week later, on August 13, Mark Calem, Vice President of Consulting for CGI, emailed Henry Chao about a “planned rollout schedule for SHOP: October 1 – Initial webinars conducted/October 15 – Online training materials available/November 1 – Employer portal goes live/November 15 – Employee portal goes live”

Chao immediately asked, “Can we sign this with blood?”

Ultimately, Rich Martin, Vice President of Consulting for CGI replied, “All light heartedness aside, we examined capacity and schedule and agree to these dates.”

As previously described, the administration announced November 27, more than a week after this agreed to timeline, that the online functions would be delayed for an entire year.

Read the complete documents online here.