Obamacare Exchange Funds Improperly Spent in Arkansas

Federal funds improperly spent on Arkansas Obamacare exchange
Federal funds improperly spent on Arkansas Obamacare exchange

A response to questions from Senator John Cornyn (R-TX) about federal spending on state-based Obamacare exchanges reveals the improper spending of one million dollars in Arkansas. The states setting up their own exchanges have spent more than $3.2 billion in federal funds, and many of those states have presided over failed exchanges and have opted to have their citizens routed to the federal healthcare.org Obamacare exchange.

Responding to Sen. Cornyn, Centers of Medicare and Medicaid Services (CMS) Acting Administration Andrew Slavitt 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.”

The state-based Obamacare exchanges have spectacularly failed in several states, including the Cover Oregon exchange in that state and the Maryland state-based exchange. The failure of the Maryland exchange lead to a court settlement with Noridian Healthcare Solutions paying back $45 million of the federal funds spent for the development of that exchange.

Slavitt’s letter to Sen. Cornyn revealed that, of the $45 million Noridian is paying back in federal funds, $32 million of that is being paid back to CMS while the remaining $13 million is being paid to the state of Maryland, despite the fact that all of those funds were from federal taxpayer dollars allocated for the development of the failed state-based Obamacare exchange in Maryland. There has been no explanation for why $13 million of those funds are being awarded to the state of Maryland nor a reason for those federal funds to be sent to Maryland rather than all $45 million recovered being sent to CMS. This has given rise to criticisms that failed state-based exchanges could lead to “slush funds” for those states.

Slavitt has claimed that all the federal funds spent on the state-based exchanges has been accounted for but that is not the case at all. Several Senators and members of Congress have questions CMS and Slavitt on the spending of federal funds on the state-based exchanges and many of those questions have not been answered.

According to a report from the Inspector General of the Department of Health and Human Services, Numerous weakness and inadequate security have been found in the Colorado Obamacare exchange. The report found that personal information could have been compromised via the Colorado state-based exchange on which more than $184 million in federal funds were spent. The exchange failed last year, leaving more than 80,000 state residents without health insurance coverage.

A 2014 report from the Inspector General found that 22 of the 23 state-based Obamacare exchanges lost money during that year. The failures of more than a dozen state-based exchanges since the implementation of Obamacare has proven how much of an epic failure the healthcare reform has been. 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. Slavitt has been nominated to position of Administrator of CMS, and has faced questions of these issues, most of which have not been sufficiently answered. And billions of federal taxpayer dollars spent on these failed exchanges has yet to be recovered on behalf of American taxpayers.