Let’s see a show of hands. How many people expected the Healthcare.gov exchange to work properly, given that the Obama administration had more than three years to develop and launch it? One would have assumed that with that kind of lead time, HHS could have replicated what insurers have operated for years — and certainly would have used that time to get project leads the certifications they need to handle contracts of the size and scope ObamaCare required. Instead, as Bloomberg’s John Tozzi reports, an audit by the Inspector General for HHS, details just how badly HHS bungled the job and wasted a large portion of $600 million in contracts:
The public employees responsible for overseeing $600 million in contracts to build healthcare.gov were inadequately trained, kept sloppy records, and failed to identify delays and problems that contributed to millions in cost overruns.
That’s according to a new government audit, published today. It reveals widespread failures by the federal agency charged with managing the private contractors who built healthcare.gov. The audit is the first to document, in detail, how shoddy oversight by the Centers for Medicare and Medicaid Services (CMS), which manages federal health programs including Obamacare, contributed to the website’s early struggles.
To develop healthcare.gov, CMS hired and managed private companies to create vast, interlocking software systems that would allow consumers to shop for insurance policies. According to the report, issued by the agency’s inspector general, lapses in oversight of those companies started early on—well before the website’s limping debut, on Oct. 1, 2013. The site faltered for months, frustrating consumers until a scramble to repair it ultimately allowed millions to enroll in health plans.
The Affordable Health Care act passed in March 2010. Less than two years later, the Obama administration issued new rules that required about three weeks of training for managing the large contracts used in the effort to build the federal exchange. That left HHS about 21 months to get those project leads the training required, but ….
In January 2012, for example, new federal rules required employees overseeing contracts worth more than $10 million to undergo 96 hours of training meant to prepare them to manage complex projects. CMS disregarded this requirement and allowed less qualified employees to oversee contracts worth as much as $50 million, according to the audit. One employee, who isn’t named in the report, oversaw a $130 million contract for at least 15 months without even the lower-level certification that the government requires for managing contracts worth more than $25,000.
And almost two years later, HHS still hasn’t achieved compliance with those federal rules. HHS now says it will take another year to comply:
The agency’s contracting staff, which continues to monitor work on healthcare.gov, still hasn’t completed the required levels of training, according to the audit. It won’t meet the federal standards until October 2016.
Actually, most of us assumed that the exchange itself would not be first significant problem with ObamaCare. Insurers have had website exchanges for years, and HHS operated something similar for several years to service Medicare Advantage programs. Critics assumed that the first major failure would be a “death spiral” of premium increases and the mass cancellation of plans that didn’t meet the ACA’s standards, despite Barack Obama’s “you can keep your plan” lie. Those arrived on schedule, but not before the collapse of Healthcare.gov, and its ongoing delays in achieving full integration with the IRS and insurers.
This IG report just serves to remind people that government should stay out of areas better served by private industry, and should be restricted to impartial regulation of markets rather than operating them. Most of us knew that well before March 2010, but this is yet another reminder.