Tech firm is behind glitchy healthcare exchange; shares rise anyway
CGI Group Inc., the Canadian tech firm behind the problem-plagued online federal insurance exchange, is showing that all publicity must be good publicity -- at least among investors.
The company’s shares are trading near all-time highs despite continued errors and glitches that have slowed Obamacare enrollment at the HealthCare.gov website to a trickle.
CGI Federal, a unit of the Montreal-based parent company, was the lead contractor on building the federal exchange that serves 36 states. California and 13 other states have built their own online marketplaces and they have generally fared better than the federal shopping site.
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Since enrollment in the federal exchange opened Oct. 1, shares of CGI are up 3% and the company’s stock has soared 56% year to date. CGI shares were relatively unchanged in Friday trading.
Open enrollment in the exchanges runs through March 31, but consumers have to sign up by Dec. 15 if they want coverage starting Jan. 1 under the Affordable Care Act.
For now, many health policy experts have placed much of the blame for the glitches on the Obama administration for taking too long to make key decisions about the exchange and for failing to test it sooner. But CGI is bound to come under increased scrutiny as computer problems continue to persist.
“The greatest threat to Obamacare right now is a computer system the Obama administration continues to defend,” said Robert Laszewski, president of Health Policy and Strategy Associates, a consulting firm in Virginia.
A spokesman for CGI couldn’t be immediately reached for comment.
For the nine months ending June 30, CGI reported more than $7 billion in revenue and profit of about $300 million. The company, founded in 1976, says it’s the fifth-largest information technology firm worldwide.
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