SMOKE AND MIRRORS: Obamacare Marketplace’s $4.5 Billion Is Now A Mystery

Written by S.C. Sherman on November 7, 2015

The United States Government Accountability Office just released a report on research into spending in the establishment of the Obamacare Marketplaces. Trying to figure where the money all went turned out to be a little trickier and less transparent than you might expect. You’d think the larger the number, it might be easier to keep track of, but you’d be wrong. With a pot this big, a lot of little birdies have wet their beaks. The State Health Insurance Marketplaces have received roughly $4.23 BILLION! Finding out where it all went is like playing the shell game at a carnival.

The GAO discovered that states reported the Dept. of Health and Human Services (HHS) and Centers for Medicare and Medicaid (CMS) spent approximately $1.45 Billion setting up the state marketplaces. In most cases, this was federal money given as a grant to the states to set up the Marketplace websites. Of the $4.23 Billion that the states got to spend on IT, only the $1.45 Billion is known to have been actually spent on that. Where did the other almost $3 Billion go? Good question.

Only a few select states actually tracked where the money all went. Only 14 states have an operational website with functioning Marketplaces and some form of IT support. Even the ones who abdicated their responsibility to have a state run Marketplace to the federal government, most of those don’t function properly, were never fully tested, and definitely don’t provide a workable experience for the poor schlep Obamacare was supposed to help.

Really…where did all those BILLIONS go? Straight into Democrat campaigns? Straight into some politician’s brother’s bank account in the Caymans? Seriously…we’re talking thousands of millions of dollars that the US Government Accountability Office has no idea where it went and the states response…we didn’t really keep track of where it went. Sounds like government. The states complained that there were many challenges to setting up the marketplace web sites. Oh, I’m sure it was difficult to figure out how appropriate a few million dollars for this and for that. Apparently, product management and oversight, system design and development, resource allocation and distribution, and implementation and operation were the areas that were the most troublesome.

So basically, the states had a hard time finding enough programmers willing to play ball. Most programmers actually like to program. It’s tough to get them to look like they’re trying real hard, but not actually program a working site. I mean you have to feel for those poor state officials. It’s difficult to hide the outright theft of federal grant funds. Successfully laundering that quantity of cash is exhausting, but they can stand proud…mission accomplished.

Even the money that went toward programming is suspect. Much of went either to IT firms or what the GAO called “Quasi-governmental entities”. That sounds an awful lot like the kind of entity that would be perfect for stealing some really large amounts of cash while not providing any working product for which they’ve been paid. That’s not even the billions that no one knows where it went at all.

How scary is it to realize that the entire Obamacare nightmare may simply be a ploy to shift a crap-ton of federal tax-payer dollars to the private sector with no intention of insuring anyone. (Yes, Crap-ton is a layman’s term for Billions upon Billions) I would normally be happy to watch Obamacare implode as the horrible idea that it was. However, the sinking feeling in my gut isn’t the taco’s I had at dinner, it’s the disheartening revelation that I didn’t see the real end game until now…a transfer of wealth, not to the poor, but to the DNC. A shell game of massive proportions cloaked in yet another entitlement for the downtrodden people of America. Too bad peasants! The politicians beat you to the Billions.

What can be done? Well, the GAO has a few poignant suggestions. No mention of anyone trying to find the thieves who stole the government’s money and penalize them. Water under the bridge. Move along, nothing to see hear. Going forward, the GAO suggests defining roles better, having a senior employee involved in each transaction, and it might be a good idea to test the sites before launching them.

How much did it cost to come up with that pathetic set of suggestions? Maybe we shouldn’t be surprised. Finding massive corruption and a network of systemic collusion between the feds and the state capitols is disheartening to say the least. Getting to the bottom of it…that’s someone else’s department. Well, at least now we know. Thanks GAO.

GAO report takeaway: Sorry we can’t find almost $3 billion. The states had it at one point. It didn’t go into IT like it was supposed to. In the future, the states and the CMS should define their roles better.

A government of the people, for the people…yeah, well, not so much. No wonder people just shake their heads and watch sports.


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S.C. Sherman
S.C. Sherman grew up a farm kid in rural Iowa. He graduated from the University of Iowa with a degree in Communications Studies. Steve is a business owner, and recently ran for Iowa State House of Representatives.. S.C. enjoys political commentary and great stories. He has written three fiction novels found at He currently lives with his wife and four children in North Liberty, Iowa.