NCPA - National Center for Policy Analysis

Government Watchdog: Billions in Funding for Obamacare’s Exchanges Not Tracked Well, Many Functions Remain Incomplete

July 27, 2015

The federal government spent billions on creating Obamacare\'s exchanges, but didn\'t track the money well -- and many of the state-run exchanges funded under the law still aren't working properly, according to a draft Government Accountability Office report obtained by Reason.

Specifically, Peter Suderman at Reason writes that the GAO found:

  • Neither select states nor the federal government tracked how much of $2.78 billion in Medicaid matching funds were used to fund exchange operations or development.
  • Of the 14 state-based marketplaces, for example, only eight were "fully operational" and "operating without service interruptions" in their enrollment functions as of February 2015.
  • Only one of the state-based exchanges, Kentucky, had completed "development of hub services functions such as verifying an individual\'s identity and citizenship, and retrieving tax information for evaluating taxpayer eligibility for insurance affordability program."
  • Only Vermont had finished work on technology to send data to the IRS, such as information on tax credits.
  • Seven states working through the federal exchange could not transfer applications between state Medicaid systems and the federal data hub, according to the report. 

The report comes just months after the CMS Inspector General sent a cautionary letter warning that states may have used exchange funds illegally. The law authorized states to use the money for developing the exchanges, but not for most ongoing operational costs.

And in a separate report last week, the GAO said the federal system's document processor "is not required to seek to detect fraud," a GAO official said, and contractors "do not perform antifraud duties." 

Source: Peter Suderman, "Government Watchdog: Billions in Funding for Obamacare\'s Exchanges Not Tracked Well, Many Functions Remain Incomplete," Reason, July 20, 2015.

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