To date, federal grants to develop state health exchanges have cost taxpayers more than $1.2B. $677M was spent to develop "healthcare.gov." Almost twice that amount was directed to the District of Columbia and 14 states in the form of grants to develop exchanges.
Seven of those exchanges are failing:
- With a total of $303M in federal grants (Oregon's exchange was supposed to provide a model for all other states), the launch was delayed for week and then for months. Independent consultants warned that the site was unworkable before launch, but the Oregon Health Authority withheld their payment in order to silence the consultants. Lawmakers have called for a federal investigation.
- Maryland received $157.2M in federal grants for a site that failed almost simultaneously with its launch. Sound familiar? The state terminated its $193M contract with its IT contractor in February. The problems are so severe that state officials announced they may scrap the site entirely.
- Massachusetts hired the same contractor that built the federal exchange, CGI. The Commonwealth's exchange suffered problems from the beginning. Worse yet, after receiving $135.6M in federal dollars, only 5,428 people signed up for coverage during the first three months. That's <1% of the Commonwealth's goal for the first year.
- Vermont's $165.2M in grants couldn't keep their CGI-built exchange from failing on its very first day. See a pattern developing? Some functions still don't work, including the insurance options for small businesses. Newsweek reported that CGI created a dummy demo site so that it would pass inspection. Lawmakers have called for an investigation.
- Minnesota's exchange director resigned in mid-December 2013 after taking a tropical vacation. Why? Site problems. Even so, 14 exchange officials were paid bonuses prior to the site's launch. Promises that the exchange would be fixed have not been met and outside consultants have said the problems will not be fixed by the end of open enrollment on March 31. To date, Minnesota has received $153.7M in federal dollars.
- During during the open enrollment period, Nevada was expected to enroll 118k. Unfortunately, only 16k enrolled. One exchange board member described this failure as "catastrophic." Receiving $83.7M for its exchange, Nevada officials have now revised downward their expected enrollee projection to 50k (or 42.3% of the original target).
- Hawaii's $205M in federal grants didn't provide hardly any return on investment. For two weeks immediately following its launch, the exchange was taken down. This seems to be the "narrative," no? To date, the exchange has only 4.3k enrollees. That's the lowest number in all of the states.
The Motley Monk offers his "kudos" to Peter Suderman and Reason Magazine for publish what other won't. This disgraceful failure provide even more damning evidence that the federal government cannot and should not run what free enterprise and the free market does best.
Let the discussion begin...
To read Peter Suderman's article in Reason Magazine, click on the following link:
"ObamaCare's Failed State Exchanges."