House committee: Obama admin official lied to Congress about ObamaCare exchange grant funding

Did a key official in the ObamaCare chain of command lie to Congress about funds recouped from state-based exchanges? Andy Slavitt, acting Administrator for the Centers for Medicare and Medicaid Services (CMS) testified in a House Energy and Commerce hearing last December that CMS had recouped over $200 million from state-based exchanges (SBEs) that have failed. Further investigation, however, shows that Slavitt’s claim was false — that the actual grant dollars recovered was about a tenth of what he claimed, and that even those dollars were not “recouped,” but just never transmitted in the first place.

The executive summary lays out the details of this misdirection:

The purpose of the December 8, 2015, hearing entitled, “An Overdue Checkup Part II: Examining the ACA’s State Insurance Marketplaces” was to examine how state-based exchanges spent grant dollars, and better understand the sustainability challenges facing the exchanges, and CMS’ role in overseeing the SBEs. In his opening remarks before the committee, Mr. Slavitt testified that “over $200 million of the original grant awards have already been returned to the federal government, and we’re in the process of collecting and returning more.” After the hearing, it was widely reported by the media that CMS recouped over $200 million from failed state exchanges.

Following the hearing, the committee requested CMS provide documents and information supporting Mr. Slavitt’s $200 million figure. After repeated requests for this information, on March 18, 2016, CMS finally produced a chart to the committee outlining the grants awarded to 49 states and the District of Columbia, the amount of each grant, and the amount that CMS de-obligated. This chart is included in Appendix B to this report. CMS did not provide any primary source documents or other materials supporting the figures in the chart. According to the chart, CMS only recovered $21.5 million in unspent federal grant dollars from the SBEs out of the approximately $4.6 billion originally awarded by the agency. The chart also reflects that states that did not establish SBEs returned nearly $300 million in unspent grant dollars to the federal government. This sum, however, was returned only because these states never established a SBE, and therefore had no use for the funds they were granted. This $300 million was not part of the $4.6 billion disbursed for the purposes of establishing the 17 SBEs, but was part of a larger pool of money that went to 49 states and the District of Columbia.

Mr. Slavitt’s testimony misled the committee in two ways: he misstated the amount of grant money returned to the Treasury, and he wrongfully implied that the funds were returned because of improper spending and CMS’ oversight efforts. According to CMS’ chart, CMS recovered a small fraction of the $200 million Mr. Slavitt declared at the committee’s December 8 hearing. In fact, the federal government has only reclaimed $21.5 million from the 17 SBEs. Further, CMS did not “recoup” these dollars. These funds were de-obligated, because the time for the grant had expired or the funds were no longer needed. None of the funds reflect grant dollars recouped by CMS due to improper spending. CMS, however, never corrected or revised Mr. Slavitt’s testimony before the committee. Further, CMS does not appear to have corrected the record with the numerous news outlets that reported CMS recouped $200 million from failed SBEs.

Go figure. In fact, that’s precisely what the House committee concludes happened. Where did the $200 million figure originate? The committee’s press release on their investigation accuses Slavitt of having “adlibbed” the figure. That’s a nicer way of saying he pulled the number out of his nether regions.

Still, don’t expect Slavitt to face prosecution for misleading Congress in the future, or even pressure to exit his job. Far more corrosive examples of Obama administration officials lying and misleading Congress have resulted in no penalties at all, including James Clapper and Eric Holder, whose Justice Department politely declined to prosecute the contempt charge Congress brought. Fibbing an ad-lib about $200 million pales in comparison to misleading the Senate over domestic surveillance, or refusing to cooperate in a House investigation into the deaths of Border Patrol agents by weapons trafficked to drug cartels by the ATF, or for that matter fudging on whether the Attorney General authorized snooping on reporters. Instead, we can just keep documenting the many ways in which it has become apparent that Obama administration officials lie whenever their lips are moving.

Speaking of which, even the New York Times has realized that the assurances given by the White House about ObamaCare premiums come from the same source as Slavitt’s $200 million recovery:

It already looks clear that many Obamacare insurance plans are going to raise their prices significantly.

Over the last few years, average premium increases in the Obamacare markets have been lower than the increases for people who bought their own insurance in premiums before the Affordable Care Act. But several trends are coming together that suggest that pattern will break when plan premiums are announced in early November. Many plans may increase prices by 10 percent, or more. Over the last two years, I’ve written articles warning against scary headlines that exaggerate premium increases. Next year, those scary headlines are more likely to be accurate.

Peter Lee runs the country’s largest and most stable state marketplace, Covered California. The typical rate increase has been only 4 percent over the last two years. Next year will be different. “We expect our rates to go up more than that this year,” he said at a recent meeting with health reporters. He predicted “big rate increases” in other states.

Only two states have collected proposed rates for 2017 yet, but in both of them, popular carriers are asking for double-digit increases. Insurers don’t always get what they want, and there is local variation in insurance rates, but these early requests are in line with statements from insurance officials and regulators about what to expect.

Actually, those scary headlines turned out to be true each of the past two years as well. Perhaps it’s time to stop scoffing at those reports as “scary,” and report them for what they are — evidence that government control of the individual-policy market has been a disaster, so much so that government officials now routinely mislead Congress and the American people about it.