HHS to Sen. Cornyn: ObamaCare Money Misspent


cornynSen. John Cornyn (R-TX) has aggressively sought to protect taxpayer funds misspent or wasted on the state Obamacare exchanges and a recent letter from the Department of Health and Human Services (HHS) responding to a congressional inquiry shows why Cornyn’s efforts are so needed.

The state Obamacare exchanges have been a cesspool of waste, fraud and abuse. Of the 37 states that received $2.1 billion in grants to establish an exchange, only 17 did so, and they got an additional $2.7 billion from the feds. In Oregon, then Gov. John Kitzhaber (D) used millions in Obamacare exchange funds as a personal “Super PAC” to ensure his re-election campaign.   HHS Inspector  General Daniel Gevinson found that Washington State’s exchanges spending federal grant money on printing, postage and bank fees.

Now, thanks to Cornyn’s efforts we have discovered that the Obamacare exchange in Arkansas has improperly spent one million in federal funds.  Andrew Slavitt, the Acting Administrator of the Centers for Medicare and Medicaid Services (CMS), wrote, “as part of CMS’s routine federal oversight of (exchanges), CMS found that the Arkansas SBM spent approximately $1 million of the state’s federal grant funding for activities that are not allowed under regulations.”

Mr. Slavitt, of course, is a former health insurance industry executive, who got government ethics rules waived in order to received a multi-million dollar golden parachute from his former company.  He came up with a scheme, some termed the “Blue State Slush Fund” that shared the proceeds of improperly spent federal Obamacare funds with blue states like Maryland, despite the “Old Line State” not contributing one dollar to the establishment of their Obamacare exchange.

A 2014 HHS Inspector General report found that 96% of state-based Obamacare exchanges lost money during that year.  More than $3.2 billion of nearly five billion allocated to the exchanges has been spent while very little of those federal funds have been recovered by CMS. It also appears that private insurers are beginning to recognize that their lobbying campaign to enact Obamacare was a mistake.

Peter Lee, Covered California’s executive director and the head of the nation’s largest state-run ObamaCare exchange has accused the executives of the country’s largest private health insurer of trying to pass the buck by attributing nearly $1 billion losses to the ObamaCare marketplace.  he blasted UnitedHealthCare for “throwing ObamaCare under the bus” by blaming its steep losses on the law.  Ironically, Mr. Slavitt is a former Vice President at UnitedHealthCare.

Obamacare appears to be a house of cards that will one day come crashing down from the weight of its own incompetence, fraud and deceit.  The quicker that day comes, the better.

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February 20, 2016 3:37 pm

It was always designed as a way to spread around our tax money to one bureaucracy or another, LL, and never to do what it professed to do. Thanks for letting us know how bad it is. Great work.