HealthCare.Gov Costs Climb to Nearly $1 Billion

The Fiscal Times

The federal government has doled out more than $840 million to build and then fix the tech--troubled Obamacare website, Healthcare.gov.

Though many have speculated about the climbing costs of the federal Obamacare exchange website that suffered a nightmarish rollout plagued with technical glitches last fall, a new investigation from the Government Accountability Office reveals its official price tag and details why the costs have soared so high.

In prepared testimony posted ahead of a House Energy and Commerce Committee hearing scheduled for Thursday, GAO official William T. Woods blasts the Centers for Medicare and Medicaid Services (CMS) for serious management issues and lack of oversight over contractors, which led to the disastrous website problems and expensive repair efforts.

Related: Over $5 Billion and Counting for Obamacare Websites

“CMS undertook the development of HealthCare.gov and its related systems without effective planning or oversight practices, despite facing a number of challenges that increased both the level of risk and the need for effective oversight,” Woods said. He added that CMS "issued task orders … when key technical requirements were still unknown” and launched the website “without verification that it met performance requirements.”

The auditors said the government went at least $150 million over budget on the initial version of the website that flopped so badly that only six people were able to sign up the first week it went live.

Woods’ testimony breaks down the cost increases to Healthcare.gov—including the cost of the data hub—which ballooned from $30 million to $85 million. He also discusses the repair efforts cost overruns, which originally started with a $90 million contract to Accenture to fix the website, but has since grown to $175 million.

Related: Millions Wasted on Broken Obamacare Websites

GAO’s investigation was performed at the request of members of the House Energy and Commerce Committee—which are expected to grill CMS officials about alleged mismanagement issues at tomorrow’s hearing.

Rep. Fred Upton, the chairman of the Energy and Commerce Committee released a statement ahead of time blasting the administration.

“The disastrous implementation of the president's health care law has already led to canceled plans, lost access to doctors, and higher premiums," Upton said in a statement. "Now add to that hundreds of millions of taxpayer dollars wasted on an exchange that is still not ready for prime time."

Related: Obamacare Fraud Controls Found Severely Lacking

While most of Healthcare.gov has been repaired, issues with the back end of the website are still causing some serious problems. Two weeks ago, the GAO issued a separate report revealing that there were at least 3 million inconsistencies found on hundreds of thousands of Obamacare applications that could lead to millions of dollars of subsidies going to the wrong people. CMS officials said they are currently working to rectify the problem.

Meanwhile, some states are struggling with costly broken Obamacare websites of their own. As of May, Maryland, Massachusetts, Nevada and Oregon spent nearly $500 million total federal tax dollars on their failed or troubled websites, and those costs are likely to climb as the states decide whether to fix or scrap their troubled websites.

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