In late 2013, when healthcare.gov was a useless, glitchy mess for members of the public, government officials had another, less-noticed problem on their hands.
Everyone knew — many from experience and many from the news coverage — that the website the government had built to connect Americans with subsidized insurance policies did not work very well on the front end for months after its launch. The dirty secret, though, was that the back-end of the site had not even been built — the part that was supposed to make sure subsidies were set properly and insurers received payments on behalf of each customer.
Congress noticed this even then, and asked Health and Human Services Secretary Kathleen Sebelius about it in a December 2013 hearing. She reassured members that it would be up and running eventually, and added, "There's a manual workaround for virtually everything that isn't fully automated yet."
Only now it is becoming clear how inadequate the agency's preparations had been. On Monday, with little fanfare, the inspector general for the Department of Health and Human Services released a damning report on waste in this part of the Obamacare program. The watchdog office found that between January-April 2014, $2.8 billion went out the door without anyone checking amounts, whether the money was going to the right insurer to pay for the correct person or whether the beneficiary was eligible.
As bad as that sounds, it's actually much worse when you consider how large a share that represents of the program's overall spending during the same period. The non-partisan Congressional Budget Office expected the Obamacare program to spend just $17 billion on exchange subsidies and "related spending" in all of fiscal 2014 (October 2013-September 2014). Based on some crude back-of-the-envelope math, that means the $2.8 billion dumped out recklessly in those four months might have actually been more than a third of what Obamacare spent during that same period.
Obama administration bureaucrats approached the launch of this program with the same smugness, complacency and hostility toward critics as congressional Democrats had shown when they rammed the law through in 2010. This attitude created the well-known technical catastrophe of healthcare.gov. That this disaster also includes a large portion from the program's first four months being misspent is hardly surprising. After all, this is the program that caused the cancellation of millions of Americans' insurance policies — a development supposedly unexpected, but not by its critics.
This is also the same program that has now left many customers with insurance that in practice pays for less of their care than before. Insurers have kept premiums from spinning out of control by raising deductibles to levels that many Americans cannot or will not pay. This is why more Americans were putting off treatment due to its cost in 2014 — Obamacare's first year — than at any other time in the 14 years Gallup has been asking this question in their surveys.
Part of the reason Obamacare now faces a disaster at the hands of the Supreme Court — which could soon find that its insurance subsidies are illegal in many states — is that congressional Democrats arrogantly shoved through the Senate the version of their bill that they had on hand, never even considering that the ungrateful masses would block them from changing it later. This week's Inspector General report provides another reminder that, from the beginning, this precise lack of diligence has been Obamacare's most defining feature.