Only One-Third of ObamaCare Exchange Money Went To ObamaCare Exchanges

We had to pass Obamacare to see what was in it, and now we???ve had to see it in action to realize how bad it truly is.

It???s one thing for states, such as Oregon and Maryland, to try to ???recover??? money the federal government gave them to build state-based exchanges after those exchanges failed. The chutzpah of wanting money to replace the money you got earlier from Washington to fail to do that which you were supposed to do with the money in the first place is galling enough.

But a new Government Accountability Office report casts this in an even worse light. According to the report, only about a third of the money spent to build state-based exchanges actually went to building state-based exchanges. And it is not obvious where all that extra money went. 

The study said the Department of Health and Human Services??? Centers for Medicare and Medicaid Services spent about $1.45 billion through this March on information technology projects to support state-based health insurance exchanges. The states said they spent 89 percent of that money on information tech projects.

The study also reported states spent $2.78 billion in combined federal and state funds on Medicaid eligibility and enrollment systems.

Some of that $2.78 billion spent on Medicaid upgrades went to information technology projects, the Government Accountability Office report said. But no one knows how much because, according to the report, ???only a selected number of states reported to GAO that they tracked or estimated this information.???

Medicaid, the government???s health insurance program for low-income people, has become the real engine of Obamacare. Ed Haislmaier of The Heritage Foundation says as few as a net of 250,000 people have gotten insurance through Obamacare exchanges, but nearly 10 million have gone on the public dole for health care through Medicaid, which states were allowed to expand, largely with federal dollars, part of the law.  

But spending on Medicaid has been even less accountable than spending on Obamacare exchanges. And that???s pretty bad. 

Of the 14 states that operate their own exchanges, not all systems functions were complete, according to the study. Some could not transmit health insurance applications between their state Medicaid systems and the federal marketplace. Others had not even tested or certified those functions.

And then there???s Oregon, which spent $300 million on building its own exchange ??? third in the nation behind far-more-populous New York and California. We now know $21 million of that went to a quirky ad campaign that featured a folk singer strumming a dreary ditty as Haight-Asbury escapees held up wooden signs behind her. 

As bad as the ads were, they oversold the product. Oregon never got its system to work, signed up only 44 people over two years ??? all with paper applications ??? finally folded the exchange earlier this year and now is working its way through lawsuits against various vendors. 

So where did the money go? Washington appears to have spent about $4.23 billion of taxpayer dollars to build the technology needed to underpin Obamacare and the accompanying expansion of Medicaid. 

The federal system crashed almost as soon as it went live and recovered only after billions more were spent to address the initial shortcomings. Two-thirds of the money spent on health exchanges??? information technology needs is unaccounted for.

On one level, it appears to be a management problem.

???States reported a number of challenges in establishing the systems supporting their marketplaces,??? the report said. ???These fell into several categories, including project management and oversight, system design and development, resource allocation and distribution, and marketplace implementation and operation.???

In short, the proper executives weren???t involved, communications was poor, testing was shortchanged with disastrous results and confusion reigned.  

On another level, this report serves as further evidence of how difficult, if not impossible, it is to build massive government bureaucracies that are efficient, responsive and competent. Two-thirds of the money spent to build what amounts to the guts of the system ??? the parts we all will depend on ??? has more or less disappeared. The GAO report does not speak to this because the requestors asked only that it explore how much did go to information technology expenses.

It???s hard to ignore the possibility that the nearly $3 billion in unaccounted for funds became something of a slush fund for Obamacare supporters. 

And it???s hard to understand how this can continue to happen.