Republicans in Congress have called for an audit of how federal money was spent by states like Vermont that drew down hundreds of millions of dollars to build their own health insurance exchanges.
The Government Accountability Office initially agreed to investigate Oregon’s use of federal grant money when state officials pointed out that despite spending close to $170 million – out of a total $304 million earmarked for the exchange – Oregonians still can’t purchase insurance through the website.
Now the GAO says it will expand its investigation to include other states, but the agency has not said which ones.
“The first thing we do on any new work is decided the scope and methodology,” GAO spokesman Charles Young said in an email. “Determining which other states will be included will be part of our scoping work. That may take several weeks or more.”
Vermont has spent $51.2 million out of $171 million it is slated to receive. That money could disappear if it is not paid out by the end of this year.
Despite ongoing problems with Vermont’s exchange website, it’s a far cry from what’s happening in Oregon.
Thousands of Vermonters have purchased insurance through the Vermont Health Connect website, more per capita than any other state, according to federal data from January.
The process hasn’t been smooth for many Vermonters who can’t make changes to their application or coverage online and are still struggling to navigate the site.
Vermont is the only state to mandate that small businesses purchase insurance through the exchange. But companies haven’t been able to use the website and have been forced to enroll directly with insurers.
State officials have given no timeline for when small business functionality will be available, except to say they’re hopeful it will happen before the next open enrollment period this fall.
With just weeks until the end of open enrollment, it’s unclear whether the state will meet its enrollment targets.
The feds are doling out grant money as it is spent, and the ongoing cost of implementing and operating the exchanges will fall to the states at the end of the year. If Vermont’s website isn’t finished by then, the state must pick up the tab for completing the project.
Gov. Peter Shumlin has said he is working with governors in other states to press for a more flexible deadline.
An audit of how money was spent could either bolster or dampen the prospects for grant funds to be extended into 2015, depending on what GAO investigators uncover.
Senate Minority Leader Joe Benning, R-Caledonia, who previously called on the U.S. attorney in Burlington to investigate the state’s contractor, CGI, for fraud, said Thursday he would like to see the GAO take a closer look at Vermont’s use of federal cash.
“This is a lot of money, and it’s a system that isn’t doing what it was promised to do, and I think it’s imperative that tax dollars be spent appropriately,” Benning said.
In February, Shumlin inked a deal with Maine-based consulting firm BerryDunn for more than $70,000 dollars to evaluate Vermont Health Connects approach, staffing and management structure.
In his request to the GAO to perform an audit of his state’s exchange, Rep. Greg Walden, R-Ore., asked that it focus more on whether the state’s management structure provided proper oversight.
A GAO report from a year ago says the federal government awarded $3.7 billion in exchange grants to the states, but had paid out only a fraction of that – $380 million – as of February 2013.
Half of the states received less than $30 million, while only 10 received $100 million or more. Sixteen states and the District of Columbia elected to build their own exchanges.
“GAO’s review of a subset of exchange grantee financial reports indicated that nearly 80 percent of expenditures have been for contracts and consulting services, much of which states spent on key activities for developing exchange information technology systems,” the report states.
That holds true for Vermont, which signed an $84 million contract with CGI to build the exchange website.
The latest figures show Vermont has paid CGI $19 million. One-third of the contract, or $30 million, is slated for ongoing operation and maintenance of the website over the next two years.
Shumlin included $10.8 million in his FY 2015 budget to pay for the operation Vermont Health Connect’s website, but if the site isn’t complete, and the federal money evaporates, those costs would be much higher.
