The PJ Tatler

Failed Obamacare Exchanges Cost Taxpayers Half a Billion Dollars

Fourteen states set up their own Obamacare insurance exchanges instead of participating in the national exchange. Of those 14 exchanges, 4 are being scrapped, and  2 more might be.

The cost of these failed exchanges is reaching nearly $500 million dollars — with the promise of more good taxpayer money thrown after the bad.

The accountability question has yet to be addressed. Who is going to refund the American taxpayer? The management of these sites resulted in a waste of epic proportions. The incompetence in setting them up is only part of the problem. A company that failed to properly construct a site was overseen by state bureaucrats. The bureaucrats reported to elected politicians.

And yet no one anywhere is stepping forward to take responsibility. We only hear insincere apologies and promises to do better.

There is absolutely no difference between putting the half billion dollars in a pile in the middle of the Mall in Washington and lighting it on fire, and giving it to these 4 states, telling them to build a website. The result is exactly the same.

We should start asking the same question that John Boehner asked about the IRS scandal: Who is going to jail?


Nearly half a billion dollars in federal money has been spent developing four state Obamacare exchanges that are now in shambles — and the final price tag for salvaging them may go sharply higher.

Each of the states — Massachusetts, Oregon, Nevada and Maryland — embraced Obamacare, and each underperformed. All have come under scathing criticism and now face months of uncertainty as they rush to rebuild their systems or transition to the federal exchange.

The federal government is caught between writing still more exorbitant checks to give them a second chance at creating viable exchanges of their own or, for a lesser although not inexpensive sum, adding still more states to The federal system is already serving 36 states, far more than originally anticipated.

As for the contractors involved, which have borne most of the blame for the exchange debacles, a few continue to insist that fixes are possible. Others are braced for possible legal action or waiting to hear if now-tainted contracts will be terminated.

The $474 million spent by these four states includes the cost that officials have publicly detailed to date. It climbs further if states like Minnesota and Hawaii, which have suffered similarly dysfunctional exchanges, are added.

Their totals are just a fraction of the $4.698 billion that the nonpartisan Kaiser Family Foundation calculates the federal government has approved for states since 2011 to help them determine whether to create their own exchanges and to assist in doing so. Still, the amount of money that now appears wasted is prompting calls for far greater accountability.

Where has that funding left the four most troubled states?

Nevada, for one, is still trying to figure out its future. Oregon has decided to switch to Maryland wants to fix its own exchange, maybe by incorporating what worked in Connecticut. Massachusetts actually wants to do both — build a portal from scratch while planning a move to the federal exchange as a backup.

Massachusetts’ dual-track approach could require more than $120 million on top of the $170 million it already has been awarded. That cost is nearly twice as much as if the state were to simply bail on its Connector, but officials seem to be banking in part on the Obama administration’s greater interest in helping the Massachusetts exchange — the once-pioneering model for Obamacare — survive.

Note to Massachusetts politicians: Over our dead body.

In fact, it would be far less expensive to simply shut the sites down rather than give these incompetents a blank check to “fix” them. That’s the option being mulled by the state of Hawaii who has spent an average of $10,000 per Obamacare enrollee because of a useless, dysfunctional website that has already cost mainland taxpayers $100 million:

Michael Gold, president and CEO of Hawaii Medical Services Association, says the state shouldn’t keep spending money on the Hawaii Health Connector, a system that he says is financially unsustainable and does not work.

“I think there’s an alternative that Hawaii needs to pursue immediately,” Gold said in an interview with The Associated Press.

Hawaii should ask the federal government for an exception to the part of the Affordable Care Act that requires states to set up and run their own insurance exchanges, Gold said. He thinks businesses should buy approved plans directly from insurance companies, as they have done in the past. Individuals would do the same, or the federal government could take over that part of the exchange, he said.

Lawmakers on Friday were outraged at Gold’s assertion that the state hasn’t already pursued flexibility from federal requirements. Rep. Angus McKelvey of West Maui said they sought waivers from the federal government and were told they had to wait until 2017.

“We tried. We aggressively pursued that,” McKelvey said. “The federal government says there’s only one route to go.”

The state already is pursuing ways to streamline the exchange by removing it as the middle-man between employers and insurers, and seeking waivers from the federal government, said Beth Giesting, health care transformation coordinator for Gov. Neil Abercrombie.

“It is a simplified role for the Connector, rather than no role for the Connector,” Giesting said.

The Legislature also passed a bill setting up a task force to pursue the waiver.

The rollout of Hawaii’s health exchange was delayed and plagued with technical problems. The Connector was awarded more than $200 million in federal funds. It has used about $100 million. It signed up 9,217 individuals, plus 628 employees and dependents. To date, the Connector has raised only $40,350 in user fees, according to Nathan Hokama, the exchange’s spokesman.

Unfortunately, there’s no law against a politician or bureaucrat wasting taxpayer money.  If there were, I would imagine we’d have to build a few more prisons to house the majority of politicians in America who have voted for “roads to nowhere” and other such boondoggles.  And a few more prisons constructed for all the bureaucrats who shouldn’t be put in charge of redecorating their office much less a $200 million dollar IT project.

So no one will go to jail. And I suspect President Obama won’t press the issue of a refund very hard, considering the fact that he doesn’t want to advertise how much money his namesake achievement has cost the American taxpayer.

Nothing to see here…move along.