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Why the Obamacare Website Failed in So Many Ways

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Speider Schneider
Speider Schneider
Web Hosting Geek

This is not a political article. It merely examines one of the biggest internet blunders in… well, at least a couple of days… maybe hours. Anyway, the first day the Affordable Care Act went live on the web, millions of users tried to get access, only to find the site was slow, nonfunctional, or was dead. The first victim of the ACA law that we were repeatedly told had “death panels” written into it.

Naturally, there were some accusations against the president, but he’s not a web programmer/back-end developer/IT expert/web host. The problem lay with someone who had planned the connectivity of the site. Where was that person from? The government has been, specifically the Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS) who issued the contracts for the website, and the mire of governmental red tape therein, silent on certain questions journalists have asked.

Political, or Digital Machinery Breakdown?

Most IT savvy people will blame it all on the server(s). Even the government is pointing the finger at “server overload.” It seems simple to expect several million people attempting to register, and sign in all at once. 17 days later, there are still the persistant problems. Perhaps the Affordable Care Act (ACA), also known as, “Obamacare,” is more popular of an idea than the politicians, on both sides, expected?

According to David Auerbach, in his article, “Quixotic Queries Question Quality,” in Slate, he states:

A server isn’t just a battery—you can’t just add more until you’ve got enough power. A peek at the architecture of reveals a vast entourage of many different servers old and new, any one of which could have its own unique crashing problem, as well as a mysterious “data hub” that was responsible for connecting them all together—and thus if one failed, they all failed.

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Andrew Couts, in his article on, “We paid over $500 million for the Obamacare sites and all we got was this lousy 404,” takes a stab at the costs involved with this whole fiasco, and, as usual, the government money-spending will not disappoint the average citizen. Most journalists, searching for answers beyond the tight government lips, have turned up some interesting and depressing findings. The answer, it seems, is in the past records of the U.S. Government Accountability Office (GAO), who writes the checks.

The GAO report from June, states that the U.S. Center for Medicare and Medicaid Services (CMS) spent “almost $394 million from fiscal year 2010 through March 2013 through contracts” to build the “federally facilitated exchanges” (FFEs) – the complex system that includes as well as certain state-based exchanges – the data hub, and other expenditures related to the Obamacare exchange system.

While GAO states that the “highest volume” of that $394 million was related to the development of “information technology systems,” a more detailed look at that cost shows that a portion that $394 million was spent on things like call centers and collection services. Take that out, and you’re left with roughly $363 million spent on technology-related costs to the healthcare exchanges – the bulk of which ($88 million) went to CGI Federal, the company awarded a $93.7 million contract to build and other technology portions of the FFEs.

Auerbach continues on budgeted cost overruns:

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That does not account for all costs accrued for this project. As the GAO states, the $392 million figure does “not include CMS salaries and other administrative costs” associated with the Obamacare exchanges. In other words, the actual cost for the development and implementation of the total Obamacare exchange system is far higher.

At this point I can only speculate on the total cost to build out and the overall technology portion of the FFEs. Based on the available data, however, a conservative estimate puts the cost so far at over $500 million. Considering the GAO estimates it will cost approximately $2 billion to build-out and operate the FFEs in 2014, this is, if anything, likely far too low.

Far Too Low?

While the average small business considers whether choosing the $4.99 a month web host or the $9.99 a month premium plan host, the government, it seems, didn’t choose wisely between the $36 million per month host and the $50 million per month premium plan for governments, royal family, and drug cartels.

Mr. Couts puts it in terms readers easily understand and support:

Government has a long history of spending money unnecessarily. But in an age when the U.S is home to the world’s largest, most successful Internet companies, how is it possible that we can’t even manage to build a functional website without blowing through hundreds of millions of dollars?


If you’re a client, and your vendor hasn’t performed to satisfaction, chances are, you would have the guts to withhold payment, or demand it be fixed right away. The government doesn’t work that way. It pays for work that’s never been done, nor ever will be done. If it doesn’t work, and you ordered 50 million units, just shove them in a warehouse, and mark them “top secret” so they will never be opened.

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If there are any lessons our political neighbors can teach us, it’s the danger of being a bad customer.

  • The point person (and accusations claim that one of the problems was having no ONE point-person, instead the project was a conglomeration of too many voices and fingerprints, causing massive delays and cost overruns) should be just that — the POINT PERSON (singular).
  • We have also learned that it’s important to demand the right job done for the right pay. Never go live until all of your website considerations are met, and tested.
  • It’s better to shop around for a reliable web design firm, and hosting source when planning your new website… or else!

This is not the first major site to crash or suffer glitches that will cost money down the line. Last week, the Target website crashed for a short time. Short, but an eternity on web time, and Target lost hundreds of thousands of dollars in sales, for just that short time. Also last week, United Airline’s website started handing out tickets for $0-$10. The company hasn’t released any financial figures as of yet, probably because this is the second time it’s happened in a month. In 2008, the airline’s website dropped a $130 fuel surcharge, but to their credit, they have always honored the tickets sold during those dark times. There will be more. THAT is the web, and only the digitally strong survive… with simple planning.

Top image ©GL Stock Images



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