At least 37 states have received a total of $4.8 billion to implement ObamaCare, but under the terms of the “establishment grants” those monies cannot be used to pay for overhead costs like rent, software maintenance, staffing and utilities.
That hasn’t stopped some states from trying, apparently.
“We have concerns that, without more detailed guidance from [the Centers for Medicare and Medicaid], [State-based ObamaCare exchanges] might have used, and might continue to use, establishment grant funds for operating expenses after January 1, 2015, contrary to law,” writes the Inspector General at the Health and Human Services Department.
“In media reports and during our review of [states’] budget information, we have observed that some [states] face uncertain operating revenues in 2015 and future years. Because operating revenues are uncertain, there is a risk that [states] might use establishment grant funds to cover operational expenses,” warns the IG’s letter.
The IG points to evidence that the Rhode Island exchange does not have a dedicated funding source, and the Washington exchange is short $125 million unless the state legislature steps in.
In other words, ObamaCare gave seed money to start expensive new state agencies that are now supposed to be self-sustaining. At least two are not, and the tone of the IG’s letter implies that many more are suspect.
If an enterprising conservative committee chairman wants to protect taxpayers while exposing one of the failures of ObamaCare, following up on the IG’s warning letter with a detailed investigation would be a good strategy.
H/T: The Hill