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About those "ObamaCare State Exchange Disasters"

At Americans for Tax Reform this morning, Alexander Hendrie reports on an audit by the U.S. General Accountability Office (GAO) of the ObamaCare state exchange technology projects. According to Hendrie:

"The Centers for Medicare and Medicaid Services (CMS) failed to conduct sufficient oversight over state-based Obamacare exchanges prior to the 2014 enrollment period, according to a recently released report by the Government Accountability Office (GAO). Taxpayers gave over $5.4 billion in grants to all 50 states and DC to plan and construct exchanges, with the 17 states that proceeded to construct an exchange receiving $4.5 billion of that amount. Since then, these funds have largely been wasted by inept bureaucrats on systems that do not work."

He listed the following problems that were faced by the state exchanges during the during the 2014 enrollment period, which began October 1, 2013. Thpse problems included:

  • Poor system performance and delays in addressing information security,
  • Partially completed software functionality,
  • Hardware problems
  • Enrollment errors causing long wait times and applications to get stuck in the system
  • Difficulties getting individuals’ identities verified through the systems,
  • The inability to easily make changes to individuals’ insurance coverage in response to events such as births or income changes.

The audit (number GAO-15-527, September 16, 2015) was performed "to (1) determine how states have used federal funds for IT projects to support their marketplaces and the status of the marketplaces, (2) determine CMS's and states' roles in overseeing these projects, and (3) describe IT challenges states have encountered and lessons learned. To do this, GAO surveyed the 50 states and the District of Columbia, reviewed relevant documentation from the states and CMS, and interviewed CMS officials."

Hendrie continued by describing the problems encountered by the state exchanges, writing:

"Prior to launch, CMS was required to evaluate the operational readiness of each state exchange. But based on the abysmal performance of many state exchanges at launch, officials clearly failed to do their job.

"In Oregon, officials were forced to install “dozens of extra fax lines” months after the launch date because the exchange website was unworkable. Key functionality in Vermont remains incomplete even today, and the system has been described as “hellish” by enrollees. In Maryland, there was zero accountability for the $190 million exchange and just four people could enroll on the first day. In Massachusetts, officials and contractors joked that their system was based on the idea that “users do testing." The poor performance of the exchange resulted in an estimated $1 billion in costs for the state.

"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. But as the report notes, these tests were insufficient and ineffective:

“CMS conditionally passed all of those states without fully ensuring that they had conducted all required system testing and demonstrated that their systems were ready for production.”

"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 has been returned to the federal government."

Arielle Levin Becker reported the results of the GAO report for the Connecticut Mirror here while Morgan True did so for the Vermont Digger here.

Tim Jost also reported on the GAO report for the Health Affairs Blog last Friday. According to Jost:

"The report is quite critical of CMS oversight of state IT funding and projects. It specifically asserts that CMS failed to have in place a comprehensive communications plan that clearly documented and defined its state marketplace oversight structure and associated roles and responsibilities, did not sufficiently involve senior executive-level personnel in project oversight, and failed to ensure that state marketplace IT projects were fully ready for operation before launch. CMS generally accepted the GAO’s recommendations based on these findings, but also asserted that its oversight and technical assistance were generally adequate, even if they did not take the form the GAO would have recommended. States that responded to the GAO gave generally positive ratings to CMS assistance and oversight, although some states identified instances of delayed or insufficient communications with CMS.

"Perhaps the most interesting section of the report describes the states’ report of the challenges they experienced and the lessons they learned from the implementation process. Among the greatest challenges identified by the states were the compressed timeframe within which they had to operate, changes in requirements during the implementation process, and inadequate staff. Developing interfaces and interoperability with insurers, state marketplace eligibility functions, and call center operation were noted as substantial challenges experienced by state marketplaces. Compressed timeframes, changes to requirements, and conducting systems integration testing were among the greatest challenges experienced by FFM states.

"Several state exchange states and the District of Columbia took issue with the findings of the GAO. In particular, the states and D.C. responded to the characterization of their operational status by the GAO, which they asserted was inaccurate. Although the report is on the whole critical, it also recognizes the magnitude of the task the states faced, and that the implementation of the marketplaces has been a learning experience for all involved."

We encourage Growls readers to take a few minutes to write your members of Congress. Find out what your Congress Critters have done recently to improve the quality of care and reduce the costs of ObamaCare. Contact information is available at Thomas (use left-hand column). Taxpayers living in Virginia's Arlington County, can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response, and tell them ACTA sent you.

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