Monday, May 12, 2014

Nearly A Billion Dollars Invested in Failed ACA Exchanges

Close to a billion dollars in federal money have been spent developing four state Obamacare exchanges that currently dysfunctional.
Massachusetts, Oregon, Nevada and Maryland —initially were all in for Obamacare, and each under-performed. All are under harsh scrutiny face uncertain statuses concerning operational healthcare exchanges. They can rebuild their systems or transition to the federal exchange.


 The federal government finds itself in a quandary with these states. It could pour more money into the broken systems to give them another chance at creating working exchanges of their own or, for a lesser investment, add still more states to HealthCare.gov. The federal system is already serving 36 states, far more than originally anticipated.

The $474 million spent by Massachusetts, Oregon, Nevada and Maryland includes the cost that officials have publicly detailed to date. That figure will balloon if states like Minnesota and Hawaii, which have suffered similarly dysfunctional exchanges, are included. The $474 million pales in comparison to the $4.698 billion Kaiser Family Foundation calculates the federal government has approved for states since 2011 to help them determine whether to create their own exchanges and to assist in doing so.

What are the noted states with broken systems plans of action?
  • Nevada is yet to determine its future.
  • Oregon has decided to switch to HealthCare.gov.
  • Maryland wants to fix its own exchange, possibly mirroring Connecticut's successfully implementation of Obamacare.
  • Massachusetts appears to want to build a portal from scratch while planning a move to the federal exchange as a backup.


Josh Archambault, a senior fellow with the right-leaning Foundation for Government Accountability, suggests that the state’s efforts to salvage its exchange are just a face-saving exercise. He believes the states with broken systems should save taxpayer's dollars by taking the cheaper option of scraping their broken portals and relocating to Healthcare.gov.

  “Instead of a quixotic sprint to rebuild the whole site in five months, state officials should instead pivot quickly to utilize the federal exchange, saving taxpayers tens of millions of dollars in the process,” 

Rep. Stephen Lynch (D-Mass.) agrees with Archambault.

“You have two choices,” Rep. Stephen Lynch (D-Mass.) said last week. “One is to expend even greater amounts of money on something that had limited success thus far or going to the federal exchange. … There’s simplicity in that, and I think that may be where some within the commonwealth would like to go.”


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