Obamacare Chief Andy Slavitt Must Answer for Billions Wasted on Failed State Exchanges

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Posted by Alexander Hendrie on Monday, December 7th, 2015, 5:30 PM PERMALINK

Andy Slavitt, Acting Administrator for the Centers for Medicare and Medicaid Services (CMS) will tomorrow appear before the House Energy and Commerce Oversight Subcommittee and its Chairman, Tim Murphy (R-Pa.) to answer for wasted and misused Obamacare state exchange funds.

Since 2011, CMS funneled $5.51 billion to states for the planning and construction of exchanges, with $4.6 billion being sent to states that decided to construct a state exchange.

It appears that a large percentage of these funds were wasted. Several exchanges including Oregon and Hawaii have already failed, while others across the country have encountered operational difficulties since launch including poor user functionality, lack of scale -- or have failed to work entirely.

Key questions remain over how these billions were spent by states. Chairman Murphy and his Subcommittee must get to the bottom of the many discrepancies and unknowns behind Obamacare state exchanges.

Under federal law, states are prohibited from using funds for ongoing operations after January 1, 2015. Instead they must be self-sustaining -- many chose to rely on a fee on premiums to fund their operations. However, according to a recent report by the Government Accountability Office, over $1.6 billion is unaccounted for – it has not been spent, nor has it been returned to American taxpayers. It is not known what has become of these funds, but Congress should ensure they are returned to taxpayers.

Of the $2.95 billion that GAO says has been spent, just $1.37 billion was spent on IT expenses. The rest was apparently spent on expenses including “outreach” and “education.” Congress needs to get to the bottom of what these funds were spent on across the states and whether it was spent wisely.

While there does not exists a full accounting of expenses, Oregon’s failed exchange spent at least $20 million on an advertising campaign when it was preparing to launch. At the same time, officials in the state were internally sounding the alarm over their system’s complete lack of preparedness. Congress must find out if there are other cases of wasted "education" projects. 

When Slavitt appears before Congress, it is imperative that he is held to account for billions in taxpayer funds spent on Obamacare state exchanges. Too much remains unknown years later.

 

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