Obamacare state exchanges have become profit center for Obama cronies

Obamacare has become a wasteland of criminality, fraud, and abuse exponentially adding to the estimated $80 billion a year that is pilfered from the pockets of the American taxpayers. Many of those dollars have made their way into the pockets of Obama cronies.

Examples of self-dealing and fraud are emerging:

  • Last February, CoOpportunity, which operated in Nebraska and Iowa, was ordered liquidated by state insurance commissioners.
  • In New York, Republic Health Insurance, which was run by labor union bosses, has been ordered to shutdown.
  • Co-ops in Colorado, Oregon, Kentucky, and Tennessee have collapsed.

So far, 46% of the federally funded co-ops in total have failed, costing taxpayers over $1.2 billion.

The Obama administration sent billions and billions of dollars worth of grants and loans to corporate and labor cronies to create Obamacare co-ops. These were created under the fiction that a non-profit provider would beat the prices of the for-profit providers. Yet, these co-ops are collapsing like dominoes.

Examples of simple fraud and the lack of measures to combat the fraud cost the taxpayers billions. The Government Accountability Office found that membership in Obamacare was padded by false information and counterfeit applications. “The federal marketplace approved coverage for 11 of our 12 fictitious applicants who initially applied online, or by telephone,” Seto Bagdoyan, who directs GAO’s Forensic Audits and Investigative Service, said in testimony before Congress.

But those examples are chump change when it comes to the state established exchanges like that in Oregon, where $6 billion was squandered on infrastructure, computer operations, call centers and even television commercials only to pull the plug when things went south. There is a federal investigation into the collapse of the Oregon exchange, as then Gov. John Kitzhaber, used the exchange as a political slush fund to ensure his re-election.

The state exchanges were paid for by federal tax dollars, yet when the federal government tried to recoup some of the month, it shared the proceeds with states like Maryland. Many have described the payments as a “Blue State Slush Fund.” The American taxpayers funded Oregon and Maryland to set up these exchanges and the states that failed to implement the exchanges should not be rewarded for corruption and gross incompetence on the part of politicians. The money should be given back to the federal government to hold for the federal taxpayer.

Rep. Rick Allen (R-Ga.) recently introduced H.R. 4262, The Transparency and Accountability of Failed Exchanges Act, to ensure that American taxpayers are not left paying for the failures of Obamacare by holding states that have set up state exchanges accountable and providing clear steps to recoup federal funds when they ultimately fail.

Rep. Allen said of his bill:

After five years of failed policies and higher cost of care, it has become crystal clear that Obamacare was not well thought out. When this legislation was signed into law, the President freely gave money away to states to establish the state exchanges— however they forgot one piece of the puzzle. They provided no solution for recovering these funds when the state exchanges failed. Billions of taxpayer dollars have been spent since—and the taxpayers should not be on the hook for subsidizing these failed exchanges. My legislation fixes the problems by providing a plan to recover federal funds when the state exchanges fail and requires unused funds to be returned back to the federal government to pay down the national debt. The shortcomings of Obamacare should not be placed on the backs of American taxpayers.

The Transparency and Accountability of Failed Exchanges Act ensures states have kept records and properly reported how federal funds were spent by requiring states to submit records of expenses to Congress as well as the Department of Health and Human Services and requires all unused funds to be returned to the Treasury Department for deficit reduction and any real property purchased be returned to the General Services Administration.

We have only begun to see the beginning of the Obama death spiral. Insurance companies who lobbied for the bill and participated in the exchanges are now seeking a bailout. Some are pulling out of the exchanges all together. At the very least taxpayers should know whether their money was spent and wasted. Rep. Allen deserves praise for trying to bring these issues to light.

Cross-posted at TheBlaze


Edward Woodson

Edward Woodson

Edward Woodson is a lawyer, now host of the nationally syndicated Edward Woodson Show, which airs daily from 3 to 6 pm EST on gcnlive.com.


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