HealthCare.gov Will Cost Over $1 Billion To Build
The Obama administration will spend over $1 billion on the still-incomplete Obamacare website HealthCare.gov by the end of the year, according to Obama nominee Sylvia Burwell’s testimony to Congress.
Tennessee Republican Sen. Lamar Alexander asked Burwell, the nominee for Health and Human Services secretary, to provide details on federal spending on the embattled health care website during a hearing of the Senate Health, Education, Labor and Pensions (HELP) Committee. Alexander serves as the ranking Republican.
Burwell responded with specifics of HealthCare.gov’s finances.
“It is my understanding that as of February 28, 2014, CMS has obligated a total of approximately $834 million on Marketplace-related IT contracts and interagency agreements,” Burwell wrote to the HELP Committee. “These expenditures include the website and the systems that support enrollment through the Marketplace, such as the data services hub as well as other supporting IT infrastructure, including cloud computing, to support Marketplace IT development.”
And that’s just through February. By the end of the year, HealthCare.gov spending is expected to rise to over $1 billion.
“The president’s budget reflects a need for approximately $200 million for all Marketplace-related IT in FY 2015, some of which is funded through user fees,” she continued. Much of this amount reflects ongoing operational and maintenance costs of healthcare.gov, as well as continued development.”
After HealthCare.gov’s disastrous roll-out last fall, the Obama administration’s tech surge managed to fix a significant portion of consumer-facing problems on the website. But the back end of the website, which communicates application information between the federal government and insurance companies, still hasn’t been finished.
Standardized insurance forms and verification systems for premium subsidies still haven’t been finished, and in theory, will be set up by 2015 using the extra $200 million the White House has requested.
Burwell notes that some of the funding will come from user fees — typically a 1-3 percent tax that Obamacare customers pay on their insurance premiums each month to fund the exchange’s operations. Many state-run exchanges are struggling to fund their own costly operations with just monthly user fees. (RELATED: DC Will Tax All Insurers To Pay For Obamacare Exchange)
A HELP committee source told the Washington Examiner that not only will the next $200 million for the website be partly paid for by “accounts the HHS Secretary has a little more leeway to spend in ways she sees fit if Congress doesn’t specifically appropriate money.”
In addition to $1 billion HealthCare.gov, the Obama administration has spent hundreds of millions on federal grants to states establishing their own exchanges. Four state-run exchanges on the edge of collapse have used $474 million in federal taxpayer dollars so far. (RELATED: Republican Senators Demand Failed Obamacare Exchanges Pay Back Federal Government)
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