Obama Care
Oh Well, it's only taxpayer money.
The federal government awarded over $5 billion to help
states set up ObamaCare exchanges, with the vast majority – $4.6 billion
– going to 16 states and Washington, D.C.
But, according to a recent Government Accountability Office (GAO)
report, much of that money has not been accounted for – and yet not returned, either.
So where did those taxpayer dollars go?
That’s the billion-dollar question.
The Patient Protection and Affordable Care Act (PPACA) required the
establishment of health insurance exchanges – known as marketplaces – to
help small employers and consumers compare and purchase insurance
plans. States opted to either develop their own state-based exchanges or
hand authority to the Centers for Medicare & Medicaid Services
(CMS). And between 2010 and 2014, CMS awarded federal grants mostly to
states setting up their own marketplaces, to help them get started.
About $4.6 billion was given to these 17 recipients, including California, New York, Washington state and Kentucky.
But the GAO report found that so far, just $1.4 billion of that has
been spent on IT projects, and a total of $3 billion has been “spent or
drawn down,” though not all the spending is detailed.
That, then, leaves at least $1.6 billion unaccounted for. Yet only
three states returned any portion of the money – a total of just over $1
million was given back.
“[T]he specific amount spent on marketplace-related projects was
uncertain, as only a selected number of states reported to GAO that they
tracked or estimated this information,” the report said.
Even though states were supposed to set up their marketplaces by the
end of last year, they are not yet legally required to return unused
funds.
Chuck Young, with the GAO, explained that the grants also could have
covered non-IT costs not addressed in the study, and the funding devoted
to IT projects will generally remain available for states’ use until
December – albeit with restrictions. “CMS said that, since March 2015,
states may have spent additional grant funds for IT projects,
re-purposed those funds for non-IT costs, or returned funds,” he said,
adding that the office expects to conduct a follow-up to this report.
But in an article on the GAO
report by the American Spectator,
health care adviser and contributor to the publication David Catron
highlighted the monetary discrepancy and raised the question of whether
Democratic officials improperly diverted or spent more than $3 billion
in taxpayer grant money.
“It’s hard to know with any degree of certainty where the money
went,” he told FoxNews.com. “So all we know with any confidence is how
much was awarded, how much went to IT and what the difference is.”
Catron pointed out that 85 percent of federal funds went to
Democrat-controlled states, and that only three states returned any
money to CMS while the remaining 13 states and D.C. have yet to return
any funds.
The spending is different from state to state. Oregon has withdrawn
just over $293 million of its $305 million and spent almost all of the
$78.5 million authorized for its IT expenses – but based on the report,
has not returned any leftover funds. California was given over $1
billion and spent $709 million. GAO found that less than a half-million
dollars has been returned to the federal government.
Representatives for the Department of Health in Oregon told
FoxNews.com that the IT funds listed on the report were only one part of
setting up the exchange, implying that remaining funding was directed
elsewhere. A spokesperson for the ObamaCare marketplace Covered
California said that when they released the 2015-2016 budget in June,
there was approximately $100 million in federal funds left and carried
it over thanks to an extension by the federal government; they now have
until the end of December to draw on the funds for the program.
A representative for the U.S. Department of Health and Human Services
insisted that if any funds are misallocated the CMS “will work to
recover the funds using remedies available under law and regulation.”
“To safeguard taxpayer funds, HHS has also put in place additional
program integrity regulations and has implemented, or is in the process
of implementing, the GAO’s recommendations,” said HHS senior adviser
Meaghan Smith.
In examining how states have used federal funds for IT projects and
CMS’s role in overseeing them, the non-partisan GAO found that
marketplaces reported spending nearly 89 percent of the funds on “IT
contracts,” but that the CMS is still trying to track states’ IT
spending in more detail.
The GAO urged CMS to improve its existing oversight roles and
responsibilities and ensure that senior executives adequately review and
approve funding decisions.
And despite all the money issued to states specifically for IT use,
the GAO underscored an array of problems – from poor system performance
to software and hardware problems – plaguing the state-based and
federally run marketplaces.
According to Dennis Santiago, risk analyst and director of the Bank
Monitor Division for Total Bank Solutions, the uncertainty doesn’t
necessarily mean the money was misused.
“What is missing is the proof that diversions did or did not occur,
and if so where,” he said. “IT costs are only part of the process. It
could be legitimate, classic pocket lining at work – or some of both.”
