In more bad news for Obamacare exchanges, QSSI, the information technology firm that manages the federally run Healthcare.gov unexpectedly quit last Thursday. The IT firm, which is the third to manage Healthcare.gov in its brief two year history, has been marred by controversy over its relationship with administration officials.
While QSSI has been credited with saving the federal exchange following its disastrous 2013 rollout, its relationship with the Centers for Medicare and Medicaid Services (CMS) has come under scrutiny for possible conflicts of interest. Andy Slavitt, formerly an executive at QSSI’s parent groups United Healthcare Group and Optum, was later made a senior advisor at CMS.
Slavitt was strangely allowed to pocket at least $4.8 million in tax-free income by indefinitely deferring capital gains taxes on the sales of millions in stock upon joining CMS. Slavitt was also granted a rare federal ethics waiver which allowed him ignore the one-year mandatory cooling off period and simultaneously be involved in contracting issues for Optum and United Healthcare while working at CMS.
This potential conflict of interest led Senators Chuck Grassley (R-Iowa) and Orrin Hatch (R-Utah) to investigate whether United Healthcare was receiving preferential treatment from CMS.
The United Healthcare – CMS relationship is the latest in a long line of suspicious and unexplained events surrounding the implementation of Obamacare exchanges.
Earlier this year, Oregon abolished its Obamacare exchange, at the cost of $41 million. Since 2011, the state received nearly $305 million with no strings attached, and no direction to construct its website.
Despite a three million dollar acid-trip themed ad campaign encouraging Oregonians to enroll on the exchange, individuals were unable to do so months after the November 2013 deadline. With a tough reelection campaign looming, then-Governor Kitzhaber appointed a favored political consultant, known as the “Princess of Darkness” to oversee the website. The debacle led to a flurry of investigations from the FBI, the Government Accountability Office, the Department of Health and Human Services, and the U.S. House oversight committee.
Unfortunately, Oregon is not alone. Exchanges in Hawaii, Massachusetts, Maryland, Vermont, New Mexico, and Nevada have all been spectacular failures that set back taxpayers billions of dollars.
Hawaii’s state exchange appears doomed to fail despite desperate attempts by the Democrat governor to salvage it. The website cost taxpayers $205 million but was only able to enroll 8,592 individuals in year one, for an average of $23,899 spent per enroll. Unsurprisingly, the website is now unable to support itself and appears poised to shut down, at estimated additional cost of $30 million.
With so many unexplained cases of wasted taxpayer dollars and inappropriate behavior from administration officials, Congress must step up its oversight on Obamacare exchanges and get to the bottom of how billions of dollars were wasted.