Could the failed Obamacare exchanges have been merely an excuse to direct payola to safely Democratic states? Based on a new report from the Government Accountability Office, and the actions of acting head of the Center for Medicare and Medicaid Studies (CMS) Andrew Slavitt, the answer may well be yes.
Let’s start with the report. Americans for Tax Reform summarized its findings:
In all likelihood, officials were aware of the issues facing these states before exchanges launched. According to GAO, CMS conducted reviews on 15 state-based exchanges in August and September of 2013. […]
Even though these tests found multiple issues related to the functionality of state exchanges, CMS passed all states. GAO’s report notes several examples where CMS found a state to have severe operational deficiencies ahead of launch, yet officials ultimately ignored these findings. GAO found documentation revealing that officials were aware that Maryland’s exchange had 100 “outstanding high-priority defects” and almost 500 defects in total, while Massachusetts had reported 1,170 defects.
As the report concludes, these problems were so severe in four states (Massachusetts, Maryland, Nevada, and Oregon) that these exchanges had to rely on alternative ways to enroll customers during the first enrollment season.[…]
While several exchanges have already defaulted back to the federal system, and many others have been characterized by severe operational problems and inept management, GAO reports that just over $1 million of the $4.5 billion of taxpayer money [spent on exchange grants] has been returned to the federal government.
Got that? The Federal government spent $4.5 billion on grants to states building their exchange programs. And despite some states demonstrably failing to use that money, like Maryland ($125 million price tag) and Oregon (over $300 million price tag), the Federal government has only managed to recover $1 million of it.
Under any other circumstances, it would be easy to chalk this up to traditional Obama-administration style incompetence. However, to do so would be to miss the details of how the Obama administration has conducted recouping its funds. As David Catron at The American Spectator reports: