May 16,2014

Press Contact:

Aaron Fobes/Julia Lawless (202) 224-4515

Failed Obamacare State Exchanges, Burwell, and a Bill to Fix It:

A Closer Look at the Hundreds of Millions of Taxpayer Dollars Wasted

We need to use the full extent of the law to get those funds back for the taxpayer.”

            –  Sylvia Mathews Burwell in response to a question from Ranking Member Orrin Hatch (R-UT) about the hundreds of millions of dollars wasted by states to implement now failed exchanges at the Senate Finance Committee hearing on her nomination to head the Department of Health and Human Services. 

Despite using nearly $5 billion in taxpayers funds to pay for state exchange grants, at least seven states and the District of Columbia have failed to build a successful website and exchange.  Encouraged by Ms. Burwell’s commitment to taxpayers, Ranking Member Hatch said, “I was glad to hear her at least acknowledge the problem and make a commitment to recouping at least some of the taxpayer funds lost in these debacles.  If she’s confirmed, I hope that she’ll live up to this commitment.” 

On Tuesday of this week, Ranking Member Hatch joined Senator John Barrasso (R-WY) to introduce State Exchange Accountability Act, a bill to force states who’ve scrapped their state-run Obamacare exchanges to repay their federal exchange grants over a 10 year period.    

On Thursday, Hatch joined Former Finance Committee Chairman Chuck Grassley (R-IA) in penning a letter to the Centers for Medicare and Medicaid Services (CMS) administrator Marilyn Tavenner asking for information about CMS’s communications with the states with regard to the difficulties they’ve had setting up exchanges and their use of federal funds. 

Here’s a look at what people are saying about the failed exchanges, Burwell’s commitment to recovering lost funds, and Ranking Member Hatch’s continued oversight and legislation to reclaim wasted taxpayer dollars: 

Wall Street Journal Editorial, 5-14-14 

Mr. Hatch and Wyoming's John Barrasso have introduced a bill that would require the states that give up and revert to the federal exchange to repay the money. Ms. Burwell wouldn't endorse the measure but did say she'd use "the full extent of the law" to recoup misused dollars. She can start by not rewarding state incompetence with more strings-unattached HHS grants.” 

New York Times, 5-14-14 

Ms. Burwell said she believed that the government should use “the full extent of the law” to recover federal money found to have been spent improperly by states running their own insurance exchanges.” 

Politico, 5-14-14 

“The Obama administration’s new pick to run Obamacare said she would use “the full extent of the law” to recover any federal funds that have been misspent on the state Obamacare exchanges that have failed.  Burwell committed to utilizing the law fully to recover funds in response to a question from ranking member Orrin Hatch of Utah. He and Republican Sen. John Barrasso of Wyoming introduced a bill Wednesday to require states that tried but failed to implement a state exchange to refund the money to the federal government.” 

Forbes, 5-15-14

“Yesterday, President Obama’s pick to be the next health secretary, Sylvia Mathews Burwell, faced questions over the troubled healthcare law. Burwell pledged to recoup any federal taxpayer dollars that were misused on failed health sign-up websites in states including Maryland and Oregon. Indeed, on the same day as Burwell answered questions, two Republican senators, Orrin Hatch of Utah and John Barrasso of Wyoming, introduced a new bill that would punish states that scrap their state-run ObamaCare exchanges in favor of a federal marketplace. The idea is to make these states pay back the federal government the money that was wasted. The bill dictates that any state that forgoes its exchange would pay back 10% of taxpayer funds every year for 10 years.” 

Fox News, 5-14-14 

“Burwell, now the White House budget director, received some of her strongest backing from GOP Sens. Orrin Hatch, Utah, and Tom Coburn, Okla., but not without some tough questions about ObamaCare, particularly about the millions taxpayers lost in botched exchange rollouts.  Appearing before the Senate Finance Committee, Burwell promised Hatch, the panel’s ranking Republican, that she would use the “full extent of the law” to recoup taxpayer money lost on malfunctioning exchanges, including the ones in Maryland and Oregon.” 

The Hill, 5-14-14 

“States that experienced severe technical problems in running their ObamaCare exchanges would have to reimburse the federal government for the cost under a Republican bill introduced Wednesday.  "This bill rightly restores accountability by ensuring that the hundreds of millions of dollars wasted by these failed exchanges are returned," said Sen. Orrin Hatch, the top Republican on the Senate Finance Committee.” 

The Washington Times, 5-14-14 

“Republican lawmakers filed a bill Wednesday requiring states that abandon their faulty Obamacare markets to repay the federal government for grant funds they received to plan and build the portals.  Sens. John Barrasso of Wyoming and Orrin Hatch of Utah say roughly half of the states that opted to set up their own health exchanges failed to build a successful website and should pay that money back over the next 10 years.” 

Fox News, 5-14-14 

Two Republican senators introduced a bill Wednesday that would punish states who completely scrap their state-run ObamaCare exchanges, requiring them to pay back the federal government for the money that was wasted.  The bill by Sen. Orrin Hatch, R-Utah, and Sen. John Barrasso, R-Wyo., would apply to states who forego their own state exchange in favor of the federal marketplace.”