The Obama administration has extended its contract with Verizon Communication’s Terremark unit, the hosting provider for Healthcare.gov, to ensure a smooth transition of the infrastructure over to HP.
According to several reports on Friday, the contract with Terremark was supposed to end Mar. 31, the day that open enrollment expires. Healthcare.gov is expected to see high daily volumes of visitors as consumers from 36 states sign up for subsdized private health insurance prior to the deadline at the end of the month.
The Terremark contract could be extended for up to seven months, according to the Wall Street Journal, with an initial four-month period, followed by three, 30-day option periods. The contract extension is worth around $58 million, the WSJ reports. Terremark received $55.4 million under the original contract, which was awarded in 2011.
HP was named as Terremark’s replacement last year following the rollout of Healthcare.gov in October, which was plagued by problems and outages throughout October and November. HP was selected prior to the Healthcare.gov launch, however.
The Centers for Medicare and Medicaid Services, which adminsters the website, said the extension was required because of extra capacity needed to be installed at HP’s data center.
More than 4 million people have signed up for private health coverage through the federal and state marketplaces since Oct. 1.
Recently, a report by MarketsandMarkets said that the North American healthcare cloud computing market would reach $6.5 billion by 2018.