Together, those four failed state ObamaCare exchanges are costing taxpayers at least $474 million
posted at 3:21 pm on May 15, 2014 by Erika Johnsen
A handful of the states that were most enthusiastic about rolling out ObamaCare and creating their own online insurance exchanges ended up crashing and burning pretty spectacularly; several of them are still without even remotely functioning websites, and a number are considering scrapping their respective endeavors and switching over the the federal site, or have already decided to do so. Considering that the federal government allotted a whole bunch of cash toward the states that elected to build their own exchanges, these state-exchange screw-ups taken together mean quite a bit of wasted taxpayer money, via Politico:
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 HealthCare.gov. The federal system is already serving 36 states, far more than originally anticipated.
Besides those four states, Politico notes, Hawaii and Minnesota could soon add their dysfunctional websites to that ignominious scrap heap, which could hike the price up even further — and that $474 million figure is only the amount that states have already spent and that officials have publicly detailed. As Phil Kerpen argues at The Federalist, that figure is liable to be much higher; although states like Oregon and Massachusetts have yet to run through the entire budget that the federal government so generously allotted to them, they aren’t likely to give the remaining balance of their federal marketplace-building grants back to the national coffers, either. Kerpen calculates that the cost of just Oregon, Massachusetts, and Maryland have already put us back by more like $655 million, and the total amount given away in federal grants is almost a whopping 5 billion smackers.
I know Democrats like to claim that they are totally on board with legislation that sincerely attempts to “fix” what they admit are ObamaCare’s obvious flaws, but we’ll see how they react to this latest offering from Senate Republicans Hatch and Barrasso, via National Journal:
Today, Sen. Orrin Hatch (R-UT) joined Sen. John Barrasso (R-WY) to introduce The State Exchange Accountability Act. The bill will force states that wasted hundreds of millions of taxpayer dollars on failed Obamacare exchanges to repay the federal government. If a state chooses to no longer operate their own individual exchange, they will have to repay Washington for all of the taxpayer funding they received for their failed exchange. Specifically, the state will have to repay ten percent of their wasted federal grant funding each year over a ten year period.
“The American people are sick and tired of writing a blank check for the health care law’s complete failures. After forcing taxpayers to pay hundreds of millions of dollars for the failed website, the Obama Administration now expects Americans to pay hundreds of millions of dollars for failed state exchanges,” said Barrasso. “Enough is enough. States that scrap their state-run Obamacare exchanges are admitting they’ve wasted millions of dollars in federal grants. It’s only fair that states have to pay American taxpayers and the federal government back for their total incompetence.”
I’m thinking that critics will likely frame this as mere petty squabbling over small potatoes to keep ObamaCare in a bad public light before the midterms, and that Republicans really need to just stop because the law is totally working — and as Ed already noted this morning, the law actually kind of is working the way it was supposed to… which is not to be confused with working the way it was advertised.