Updated Study On ObamaCare Website Cost Blows The Mind

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(Source: USASpending.gov)

Amid missed deadlines and still faulty site code endangering user information, PPD has decided to update our ObamaCare website cost tracker. When it first became evident that the site had serious problems, we released a fact-check report that calculated an approximate ObamaCare website cost to exceed $500 million.

The up-to-date ObamaCare website cost for the incomplete, fatally flawed ObamaCare website has topped $1 billion, far exceeding the nearly $400 million estimated by the Government Accountability Office and approximately double the original ObamaCare website cost calculated by People’s Pundit Daily in the month of October.

Our earlier projections were based upon the now-known to be flawed Government Accountability Office report, which is still used to identify the top 10 contractors hired for online exchanges in the 36 states where the federal government is either solely or predominantly responsible through 2014, at least.

But that isn’t the only mind-blowing revelation regarding the updated study calculating more accurate figures surrounding the total ObamaCare website cost.

(Also Read: ObamaCare Cost To Push Health Expenditures To $5 Trillion By 2022)

It must be noted that these figures, which are gathered from USASpending.gov, only cover contracts leading up to the rollout and just prior to the partial government shutdown, not money spent following the failed rollout.

Nevertheless, what is obvious from the contract issuance dates, is that spending was heavily increased leading up to the rollout, and in most cases, shifted from some companies to others. What this would seem to indicate is that the administration was fully aware of the problems headed their way, and attempted to correct them last minute. Of course, they were unsuccessful.

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As can be seen above in both the table and interactive graphic, the now-infamous company CGI Federal Inc., was awarded ObamaCare website-related contracts totaling $149.9 million during the final 6 months leading up to the failed rollout just after September 30. CGI Federal Inc. is a subsidiary of the Montreal-based CGI Group Inc., and is in large run by the senior vice president Toni Townes-Whitley, who also happens to be a Princeton University classmate of first lady Michelle Obama and a political donor for the president.

Interestingly, CGI Federal Inc. was one of the few companies that didn’t not see their funding redirected despite the massive failure and incompetence associated with the company’s work. In fact, the $149.9 million in contracts awarded in the final 6 months represents 35.5 percent of the whopping $421.8 million the company received since the government began awarding ObamaCare-related contracts in March 2010.

CGI designed large parts of the government’s healthcare.gov site, which is supposed to serve as a gateway to all of the exchanges and is the centerpiece of the federal exchanges. CGI has taken a substantial amount of the blame for the site’s troubles, which include locking up on consumers, erasing their data and sending multiple and confusing notices to insurers about who’s purchased their products.

The ObamaCare website cost burden shared by CGI Federal is most assuredly higher than current numbers show, because we know that it wasn’t until October 21 that the Department of Health and Human Services asked CGI to add the “A-Team” personnel in order to fix back-end site problems, which we still know exist today. The code necessary for relaying secure user information to insurers and building payments systems is being paid for with contracts that haven’t yet been made available for public scrutiny.

(Also Read: PPD Study: 145 Million Americans Will Lose Their Health Insurance Plans)

As is the case with CGI Federal, Quality Software Services Inc., which is a subsidiary of Minnetonka, Minnesota-based UnitedHealth Group Inc., the largest U.S. health insurer, was also awarded ObamaCare-related contracts representing a ramping up of efforts to fix the seemingly known problems with HealthCare.gov. However, unlike CGI Federal, they may actually be doing the work they are contracted to do.

QSSI was awarded contracts totaling $65.4 million during the final 6 months, an astonishing 42 percent of the total funding the government has awarded the company for ObamaCare-related contracts since 2010. The increase in contracts propelled QSSI to the second-highest beneficiary.

What exactly does QSSI do?

QSSI designed the programming that ensures consumers reporting financial status and citizenship status is correct when they apply for federal subsidies to buy coverage. In most cases, people return to the site after they have already shopped for specific plans, and when they return that information must again be validated.

Another big beneficiary of the last-minute spending spree to salvage the problem-plagued ObamaCare website, was National Government Services Inc. or NGSI. NGSI is a subsidiary of the Indianapolis-based WellPoint Inc., which was awarded nearly 60 percent of its total ObamaCare-related contracts in the final 6 months.

NGSI is mostly responsible for the Small Business Health Options Program, dubbed the SHOP exchanges. We will not fully grasp the quality of their work until the end of 2014.

(Also Read: ObamaCare Fact HQ)

The biggest loser appears to be Navigant Consulting Inc., a company that was not awarded any new contracts in the final 6 months leading up to the failed rollout. Navigant Consulting Inc. will be featured in more detail in our next study, which looks solely at the amount of money the administration has spent on consumer outreach, general ObamaCare-related advertising and data collection.

Based on just these 10 firms’ contribution to the total ObamaCare website cost we can ascertain a few things. Whatever capacity each of these companies may be responsible for constructing the federal online health insurance marketplace, the original GAO projections, as well as our own, will far miss the mark.

Second, the shifting of money and last-minute surge in spending shows that the administration knew it was headed for a disaster and seemingly made an attempt to avoid it. Navigant Consulting Inc., for instance, probably did not receive any new money because they were not going to need the information gathered by the company to help push a website that didn’t work.

But most disturbing, mind-blowing revelation from the study is that money was not appropriated based upon performance. Despite the clear failure of CGI Federal Inc., they still received a ton of money leading up to the failed rollout. Apparently, it pays to bunk with Michele Obama in college.

While we will continue to update our figures, Chairman of the House Oversight on Government Reform Committee Darrel Issa, who is a Republican representative from California, said that information obtained by the committee shows the price tag likely topping $1 billion by the time all is said and done.