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February 28 2014

The Price of ObamaCare’s Dysfunction

Patrice J. Lee

Healthcare.gov’s rocky rollout and persistent problems have garnered substantial attention, but it was not the only the ObamaCare website that struggled. While it has recovered following a new course of action, a new firm to manage the fixes and continued development, and more taxpayer dollars, some state-level websites are still in serious trouble. Maryland’s online exchange remains in turmoil and state officials are considering giving up on it entirely.

Numbers were released to state lawmakers yesterday that outline just how much has been spent to resuscitate the ailing Maryland healthcare insurance website. So far the state has paid $65.4 million to the contractors the state hired to build the system. That contractor is out and costs are still expected to rise as officials decide whether to try to fix the website, replace the whole system, or nix everything entirely.

The Washington Post reports:

The review of the Maryland Health Benefit Exchange, by the legislature’s budget analysts, found that state spending on the site has exceeded expectations. The report says the state is seeking to tap $30 million from the federal government that was not to be allocated until later. Also, the rate of spending is unlikely to taper off next year, as planned, because of the problems.

Maryland’s decision to build the complex online exchange on a tight deadline was a “high-risk undertaking” from the outset, budget officials wrote in their report. Maryland made the process more challenging by trying to add features — like a Medicaid renewal function — to the health insurance marketplace.

The report warns against overreaching and dallying as the state searches for solutions.

The report says officials must decide quickly what to do about the broken health exchange and have five options: Fix the system; develop a new one; adopt technology that was successful in Connecticut, Kentucky or other states; join a multistate consortium; or use the federal marketplace.

State lawmakers have said health officials are leaning toward adopting another state’s technology or joining a consortium.

Maryland received $182.2 million from the federal government to pay for the exchange, and those funds are supposed to cover expenses through the end of the year. If Maryland decides to scrap the site entirely and link up with others states in a consortium, taxpayers would be right to be outraged over the complete and utter waste of millions of their dollars. However, that may be the most prudent and –in the long run- most economic way to salvage this debacle. I would hope in that case that the state would return the balance of unused funds.

Interestingly, Maryland officials are not the only ones who contemplated axing their insurance websites after rollouts exposed a painful failure to deliver a functioning product.

A lengthy new Time article exposed that President Obama himself considered scrapping Healthcare.gov and starting over at the height of the website’s problems last fall. According to the piece, mismanagement, confusion, lack of government oversight during the development phases, and duplication of efforts plagued the entire process. Apparently, the White House was aloof and disinterested in the launching of the site.

What does all this boil down to? An expensive lesson that expansion of government into the private sector comes at a cost: the waste of hundreds of millions of taxpayer dollars, the loss of freedom, the embarrassment of the public sector, and harmful unintended consequences.

Here, we have seen how inadequate central planning is at developing and executing broad and sweeping new programs that require many actors working in a coordinated way. Somehow eBay and Amazon do it and do it well though. When the pressure is turned up our political leaders opt for the fastest and easiest way to divest themselves of the blame.

Failure is a part of business and life. The key is to fail small and learn lessons that can be applied to future undertakings. The Administration and universal healthcare advocates opted to make a big splash with ObamaCare. Now they can’t even tread water. From Annapolis to the White House, I am afraid that the lessons of these failures have not nor will not be learned and are bound to be repeated.

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Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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