Taxpayers Shell Out $5.4 Billion for State Obamacare Websites

The Obama administration has given almost $5.4 billion in federal taxpayer money to states for the attempted construction of Obamacare exchange websites since 2011, according to official data. These billions have been funneled through the Centers for Medicare and Medicaid Services (CMS) to nearly all 50 states as well as the District of Columbia.

Since ATR originally published this information in November of 2013, numerous states received further grant money prior to the December 31, 2014 deadline. An update to this information is important now because of the upcoming Supreme Court ruling in King v. Burwell, a case challenging the constitutionality of healthcare subsidies for individuals enrolled on a federally administered exchange.

The text of the law clearly permits individuals on a state exchange to receive subsidies but does not mention individuals on a federally run exchange. If the court ruling invalidates federal subsidies, as many experts predict, 37 states that rely on the federal government to administer Obamacare would likely need to set up their own state-run exchange. In turn, this could mean billions more in federal grants. States that set up their own healthcare exchange received over 80 percent of the existing $5.37 billion in grants.

Federal grant money was divided into four categories. Planning grants were given to almost every state and DC, although three states returned all or part of their planning grant (Florida, Louisiana and New Hampshire).

Level one establishment grants provided one year of funding to states following their planning grants. Level two grants provided funding to states that were further along in the establishment of their exchange and met certain criteria established by CMS.

CMS also awarded seven states with “early innovator grants” with the goal of assisting these states in the development of IT models that could later be adopted and implemented by other states. This initiative was largely unsuccessful. Three states later returned funding (Kansas, Oklahoma and Wisconsin), while other states that received these grants including Oregon and Maryland had some of the worst performing exchanges in the country.

See the list, and breakdown of grant type here.​

Information on each grant can be found here. 

See the total funding each state received below: