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.


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But…. But….

It isn’t the people’s money! That came out of Obama’s stash, which is the taxpayer’s pocket, supplemented by China! And that money went to deserving Democrat special interests, so why are why whining?

Vanceone on May 15, 2014 at 3:28 PM

Yeah but imagine what they would cost us if they were successful. Freedom isn’t free.

kcewa on May 15, 2014 at 3:28 PM

Think of all the lovely artwork that you could have bought for VA Healthcare Centers for $474 million.

slickwillie2001 on May 15, 2014 at 3:28 PM

Hey – no one ever said the “affordable” in the “Affordable Care Act” meant that taxpayers could afford it.

natasha333 on May 15, 2014 at 3:30 PM

Want to fail epically and get paid well? Work for a blue state government?

22044 on May 15, 2014 at 3:31 PM

We’ve left the crazy zone, we are in the “are you friggin’ kidding me” zone…

PatriotRider on May 15, 2014 at 3:33 PM

Think of all the lovely artwork that you could have bought for VA Healthcare Centers for $474 million.

slickwillie2001 on May 15, 2014 at 3:28 PM

I know, it would make the waiting time so much more enjoyable…

PatriotRider on May 15, 2014 at 3:34 PM

Cash for Clunkers….

Electrongod on May 15, 2014 at 3:36 PM

No one can do anything about it.

albill on May 15, 2014 at 3:37 PM

You can’t point out where the numbers are wrong because they’re not. You can only insult.
 
rogerb on May 13, 2014 at 8:29 PM

 
When will you let it sink in that your numbers, no matter how simple, no matter what the source, no mater how incredibly impressed you are with your ability to press calculator buttons, do not match reality?
 
Beautiful theories fall before ugly facts all the time. The key is the facts are right and the theory wrong. Theories that do not correctly model the real world have one use- science fiction.
 
Tlaloc on May 13, 2014 at 8:35 PM

rogerb on May 15, 2014 at 3:40 PM

Big deal! The feds are broke and no amount of stealing my money will change that. The blue states got it and got it good. So how do I get in on the free money and no accountability?
Donate to a Democrat you say, how much?

libbyscooter on May 15, 2014 at 3:41 PM

…Nancy Pelosi to comment about ‘this stimulus’ too the economy?

KOOLAID2 on May 15, 2014 at 3:41 PM

I recently had the folks at GoDaddy build a web site for a business of mine – including full e-commerce shopping. The site cost me $6,200 and has generated over $40k in sales in the first 5 months online.

Conclusion = Private Sector

jake-the-goose on May 15, 2014 at 3:42 PM

Smart Power!.

The money went somewhere. Where did it go? In who’s hand did it end up in? Like the other taxpayers dollars, from all the failed green energy industries, to the ridiculous 600 million for a website, to this, etc. Wanna bet it ends up funding a large part of the coming election cycles, and bailing out unions?
Where.Did.It.Go.???

Mimzey on May 15, 2014 at 3:42 PM

More subterfuge huh Nancy.

Actually….it is!!

can_con on May 15, 2014 at 3:44 PM

Why didn’t they just buy us each a doctor? Just kidding, it’s not like it’s real money.

Cindy Munford on May 15, 2014 at 3:45 PM

That’s really a glass half empty way of looking at it. Sure it’s costing the people $500 million, but that $500 million is going to cronies who donated to politicians.

So there is that.

Skipity on May 15, 2014 at 3:47 PM

Utopia don’t come cheap patriots. Now pay up suckers!

Murphy9 on May 15, 2014 at 3:50 PM

Seriously, though, it’s not their money and they don’t care. No one will lose their job over this, and more than likely everyone involved will get a raise come evaluation time.

rogerb on May 15, 2014 at 3:57 PM

Massachusetts, Oregon, Nevada and Maryland

Three blue and a sort of purple state.

Pull the trigger.

BuckeyeSam on May 15, 2014 at 3:57 PM

“But my right to healthcare! It’s MY right!!!”

//

Deckard BR on May 15, 2014 at 3:59 PM

It is designed to fail. Crush the private insurers, and force us all into single payer. It’s that simple.

Vote them out. Repeal the stupid law. It’s that simple.

I don’t know what else to say.

Doc Holliday on May 15, 2014 at 4:01 PM

That’s really a glass half empty way of looking at it. Sure it’s costing the people $500 million, but that $500 million is going to cronies who donated to politicians.

So there is that.

Skipity on May 15, 2014 at 3:47 PM

Didn’t I read just yesterday how CA alone pissed away $1.2b so maybe this is a success story. I’m ready to give these folks everything they want and sit back and watch. Minimum wage to $15+ an hour would be an interesting financial catastrophe to watch while health care goes the way of a 3rd world nation.

The cronies don’t care if a Big Mac costs $20 and they can buy their own doctors if they get sick. This community organizing fundraiser in chief is sure benefitting the poor and downtrodden.

tej on May 15, 2014 at 4:12 PM

All the things liblikeaslave claimed.

Schadenfreude on May 15, 2014 at 4:17 PM

Some serious fraud going on here.

NavyMustang on May 15, 2014 at 4:43 PM

http://market-ticker.org/akcs-www?post=229015

Federal health officials recommended Wednesday that hundreds of thousands of Americans at risk for AIDS take a daily pill that has been shown to prevent infection with the virus that causes it.

If broadly followed, the advice could transform AIDS prevention in the United States — from reliance on condoms, which are effective but unpopular with many men, to a regimen that relies on an antiretroviral drug.

It would mean a 50-fold increase in the number of prescriptions for the drug, Truvada — to 500,000 a year from fewer than 10,000. The drug costs $13,000 a year, and most insurers already cover it.

The beneficiary of this will be Gilead, of course. How many lobbyists did they send to DC to get this crap pushed out?

First, let’s talk money. $6.3 billion in additional revenue for a drug that I’m reasonably sure costs 1/100th of that price to make. How many rubbers can you buy for $13,000 a year, and how many times would you have to **** in a year to use them all up?

Oh we can’t talk about that, right? We can’t possibly have a conversation that focuses on cost of alternatives, and if people choose not to use a cost-effective means of prevention, well, that’s a choice.

Oh no, instead we have to force a monstrous expense on “insurers” who will then of course end up effectively charging those not at risk — by force, since Obamacare is now law — to pay for those who are.

How do you like the feel of that gun up your *******, Mr. and Ms. Straight American who doesn’t sleep with either gay men or IV drug users? That $6.3 billion a year is going to come out of your wallet — by force.

It gets better — both the cost and human misery from this decision are not going to end there. See, no drug is free of side effects and this one has a few nasty ones, including kidney and liver damage. So in addition to the drug’s expense there is a requirement to perform regular testing to try to detect that damage. But that’s no panacea and a destroyed liver or kidneys are both very serious.

In the former case you either get a transplant or die and in the latter case you wind up on dialysis and either get a transplant or (eventually) die. I suppose the medical industry would prefer the kidney destruction; that way they can bill everyone for the dialysis first — before you expire.

Never mind the risk of acute inflammation of the pancreas, which is also a potential side effect. That’s pretty nasty too.

If you think the risk of any of those side effects is worth not donning a rubber instead should you be materially “at risk” then have at it. With your money, with full disclosure, and without insurance coverage if any (or all!) of those bad outcomes visit you.

In other words, your ass, your choice, your consequences and your bill.

Is this a reasonable drug to prescribe? Well, if you have HIV already it would appear to make plenty of sense. After all, if you have the infection and fail to control it, you’re cooked.

But as a prophylactic treatment when barrier methods are effective, cost a tiny fraction of the price of the drug and have none of the potential serious and possibly fatal side effects?

Murphy9 on May 15, 2014 at 4:58 PM

All the gold in California
Is in a bank in the middle of Beverly Hills
In somebody else’ name

Yes, it is.

And this almost HALF A BILLION $$ is in people’s bank accounts, too. People who took it to build websites they then did not build.

We call that “fraud” where I come from. We send ‘em to prison.

Adjoran on May 15, 2014 at 5:17 PM

It is designed to fail. Crush the private insurers, and force us all into single payer. It’s that simple.

Doc Holliday on May 15, 2014 at 4:01 PM

That’s what they wanted in the beginning.

Vote them out. Repeal the stupid law. It’s that simple.

I don’t know what else to say.

Doc Holliday on May 15, 2014 at 4:01 PM

Need an opposition party.

David Blue on May 15, 2014 at 5:21 PM

So, wrecking the medical standards and quality in the USA and wasting billions of taxpayer dollars (yes, billions, when all is said and done) was “worth it” to accommodate ten percent of the population who “couldn’t get insurance” and/or “wouldn’t get insurance”?

That sounds about what Obama’s standards are: ruin everything, because ‘smarter than you’.

Lourdes on May 15, 2014 at 6:11 PM

Some serious fraud going on here.

NavyMustang on May 15, 2014 at 4:43 PM

The org. selected by Sebelius/Obama to ‘build’ the Obamacare website was identified as engaged in fraud — big fraud — BEFORE they were selected and even named after their massive bad work was identified on Obamacare to ‘design’ others for the Obama Admin.

It’s never made ANY sense, this mess.

Lourdes on May 15, 2014 at 6:14 PM

Half a billion. That sure is a lot of free healthcare.

jake49 on May 15, 2014 at 6:49 PM

Think of all the lovely artwork that you could have bought for VA Healthcare Centers for $474 million.

slickwillie2001 on May 15, 2014 at 3:28 PM

A year’s salary for 2000 docs to clear the VA backlog, spent instead on incompetent programmers.

talkingpoints on May 15, 2014 at 8:14 PM

Actually, if they would tie that into the bill, forcing the states to repay the money to the federal government that would then allocate it to the VA healthcare system, it would make it harder for Democrats to vote against it.

talkingpoints on May 15, 2014 at 8:16 PM

Obama’s convoluted money launder scam to pay off political cronies by looting the nat’l treasury is going to plan.

Can we impeach this ahole yet?

locomotivebreath1901 on May 15, 2014 at 9:19 PM

Not much left to say, except . . .

Shame on you, Mr. Chief Justice. You could have stopped this before it got started. Instead, you chose the weasel path of accomodation to tyranny.

We didn’t expect anything different from the Socialists. We expected much better from you.

Freelancer on May 16, 2014 at 2:52 PM