Obamacare Proves That Math Is Hard

The House Energy & Commerce Committee released a report this week that should be of great concern to all taxpayers. It seems a senior official in the Obama Administration may have seriously misled an investigative Congressional panel regarding hundreds of millions of dollars that were expended under Obamacare.

At the center of the problem is a provision in Obamacare that provided federal grants to states that opted to create a state-based health insurance exchange.  The federal government doled out more than $5.5 billion for these efforts; however, only 16 states and the District of Columbia created state-based exchanges. Approximately $1 billion was given to states that never created an exchange. Further, many of the states that did create an exchange completely mismanaged the process and lost hundreds of millions of dollars. Money that was either unspent or misspent by states should be returned to the federal government.

As National Taxpayers Union (NTU) noted in a letter to Capitol Hill:

“For instance, Oregon, which received approximately $305 million to establish its exchange, has terminated its program entirely and opted to use the federal system. Hawaii, which received $205 million, could reportedly follow suit. Massachusetts, which had its own functioning state insurance exchange long before the passage of Obamacare, was given roughly $234 million by the federal government to make their system compliant with the federal law. Yet it encountered serious problems determining the eligibility of applicants and erroneously placed hundreds of thousands of residents into Medicaid. Many other states are facing similar difficulties.”

Last summer, NTU urged Congress to conduct additional oversight into the matter. In December 2015, a subcommittee of the House Energy & Commerce Committee tried to get to the bottom of the situation by holding a hearing with Acting Administrator of the Centers for Medicare and Medicaid Services (CMS) Andy Slavitt. During the hearing, Slavitt testified that states had returned $200 million back to the federal government. That’s far less than what should have been recouped, yet it appears to be a significant overstatement of the facts.

After the hearing, the Committee requested additional documentation that would substantiate his claim. The information provided by CMS subsequently showed that states had only returned $21.5 million – far from Slavitt’s $200 million figure. This is no small matter. As the Committee report notes, “Slavitt’s testimony misled the committee in two ways: he misstated the amount of grant money returned to the Treasury, and he wrongfully implied that the funds were returned because of improper spending and CMS’ oversight efforts.”

Slavitt already faced a tough road to Senate confirmation due to serious ethical concerns. This new flap could further endanger his chances. But more important for taxpayers, it shows the need for Congress to conduct further oversight and hold the Administration accountable for waste fraud and abuse.

One way it can do so is by passing H.R. 4262, the “Transparency and Accountability of Failed Exchanges Act,” which would create additional accountability measures for funds disbursed to create state-based health insurance exchanges under Obamacare. NTU is an enthusiastic supporter of this bill, which was introduced by Rep. Rick Allen (R-GA).

However, passage of this bill should be just the beginning of Congressional action on this matter. With a sluggish economy and a national debt creeping toward $20 trillion, taxpayers cannot afford to let the Administration once again get away with squandering billions of our dollars.