Obamacare Wasteland: The Rest of the Story


Yesterday, we highlighted the outrageous, wasteful spending taking place within Obamacare, particularly the defunct state exchanges. If you thought the dollar amounts were egregious, brace yourself for more spending insanity. Phil Kerpen, a well-renowned free-market advocate, reveals how Politico’s $474 million figure based on 4 states is only the tip of the iceberg.

Rather than focusing only on what the states already spent, which Politico did, Mr. Kerpen looks at the full amount granted by the federal government to the states. His reasoning: it is unlikely that Washington will recoup any leftover money.

“First, it is highly likely the states will keep the full amounts, because there is no obvious mechanism, unfortunately, to force them to return the funds.  Consider Oregon, which has about $57 million remaining. Ace reporter Chelsea Kopta of KATU – which has owned the Cover Oregon scandal story – immediately asked Oregon’s state CIO Alex Pettit about the unspent funds when the state exchange voted to shut down. His answer? They’re keeping it all.

Second, the amounts “spent so far” are self-reported by the states and almost certainly – in the case of the states with scandalous failures – lowball estimates to minimize political embarrassment.  The only absolutely accurate numbers we have are federal grant data.” [1]

Kerpen’s account, listing everything from state planning grants to level-two establishment grants, shows that $655 million alone was given to Oregon, Massachusetts and Maryland whose exchanges have been scrapped. When you add Nevada, the amount jumps to $746 million – a far cry from $474 million. His research did not stop there. Factoring in Hawaii, Minnesota and Vermont – very troubled exchanges, which could face a similar R.I.P. fate – the cost to taxpayers becomes a gasping $1.2 billion, which continues to grow as we noted yesterday.

Forbes’ analysis isn’t helping the Administration either. As noted, Obamacare is obviously vying to outdo Cash for Clunkers – the ebenezer of mismanagement – which also claimed to be a job-creating money saver.

“[B]ecause most of the vehicles garnering such rebates would have sold anyway, taxpayers ended up paying about $24,000 per additional car sale these incentives produced. Obamacare appears to be in a fierce race to beat Cash for Clunkers to become the poster child for mismanagement of federal taxpayer resources:

  • In the first open enrollment period, the State of Hawaii spent nearly $25,000 in federal funds per enrollee who signed up for coverage on its Obamacare Exchange.
  • For every dollar in premiums for exchange-provided coverage, federal taxpayers paid 94 cents in various subsidies to either enroll people or encourage them to purchase coverage on the Exchange.
  • Premiums on the Exchanges would have more than doubled in 10 states had the federal amounts used to set up the Exchanges been incorporated into premiums rather than paid separately by taxpayers.” [2]

In an economy where families are struggling to put food on the table and businesses are trying to keep their doors open, this messy management of our money, not Washington’s, is an insult to Americans.

It’s time to reign in wasteful spending. Obamacare must go.