How Much Does HealthCare.gov Cost And Where Does It Go?

Proponents of the president’s “signature” law — Obamacare — went ballistic when widespread reports claimed the HealthCare.gov site costs $634 million. Opponents of the law went ballistic, as well, but obviously for different reasons.

Speaker of the House John Boehner asked the very question on the minds of millions of Americans. “What a train wreck. How can we tax people for not buying a product from a website that doesn’t work?” And there didn’t seem to be any light at the end of the site’s very dark tunnel, with report after report concluding that the software issues surrounding the online portal were nowhere near being fixed.

On Thursday, the website Digital Trends reported that government documents revealed a $93 million contract awarded to CGI Federal Inc., was one of many totaling $634 million to establish HealthCare.gov. As you could imagine, when I took a look at the figures to fact-check Digital Trends, they were a bit obfuscating.

It would appear that some of the figures were dating back prior to the passage of Obamacare, some as early as 2008. Below is a table of the costs — per year — that were included in the original Digital Trends report.

Contracts/Awards Timeline for All Years

Source: USASpending.gov

Digital Trends has revised its estimates down to $500 million amid criticism, but that doesn’t answer the burning question, which is why the government would even be spending money on relevant projects prior to congressional passage. These contracts were, in fact, awarded to the Department of Health and Human Services. Nevertheless, the second estimate is a credible number and, in reality, may be a conservative figure.

If we take into account a total $398 million in obligated contracts for building the website and the entire technology portion of the FFE — including the massive data hub, call centers, network security, training and support, financial management systems and all other information technology services that support the new online and offline marketplace, as reported by the Government Accountability Office (GAO) back in June — we arrive at the figure that sits just shy of $400 million.

However, the report from the Government Accountability Office — shown below — failed to take into account the more than $100 million additional tax dollars that had been spent on salaries and administrative costs, which brings the cost figure for the FFE to more than $500 million. Also from the GAO report, we see that CGI Federal was awarded $88 million — out of the $398 million in total — for both the FFE information technology and HealthCare.gov through March 31.

Smaller contracts in the report, as well, were specifically allocated for the “Web portal,” which totaled $55 million. But because the company refused to comment over the last three days, just how much of the remaining funds could have gone in part to website-related costs, is simply unknown.

What can be said regarding how the government spent taxpayer money on HealthCare.gov, isn’t a matter of “how” at all, but rather “where” they spent taxpayer money. The total contracts awarded to Health and Human Services are, not surprisingly, confined to the area in and around Washington, D.C. According to the latest figures from 2012, 5 out of the 10 wealthiest counties in the country are in and around said area, although the geographic location is home to just 5.5% of the nation’s entire population.

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The money appropriated to the successful construction and maintenance of HealthCare.gov found thier way to only two states – Virginia and Maryland. The runner up — Virginia — was awarded a total of 69 contracts totaling $270.4 million, which represents approximately 42.62 percent of the total funds. Maryland, who was the number one recipient of taxpayer dollars set aside for the funding of HealthCare.gov, was awarded a smaller number — 45 — total contracts, but received $364 million, representing 57.38 percent of the pie.

Thus far, the only certainty with the cost of HealthCare.gov is that the approximate $500 million figure is certain to rise, because the software code, which is the very heart of the construction of the site, appears to be at the root of all the problems. “I would be careful about jumping to any conclusions before fully understanding what was included in each contract,” said George Edwards, a computer scientist and professor at the University of Southern California. “But I can say that, just as in other industries, as you compress the project schedule, the overall cost increases.”