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Reed Introduces Bill to Restore Taxpayer Dollars Wasted on Abandoned Obamacare Exchanges

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Washington, DC, May 21, 2014 | comments

Tom Reed announced Wednesday introduction of the State Exchange Accountability Act, a bill that requires states with failed Obamacare exchanges to reimburse the federal government for federal taxpayer dollars wasted on the abandoned state exchanges. Original Cosponsors Reps. Steve Scalise (LA), Diane Black (Tenn.), Pat Tiberi (OH) and Lynn Jenkins (KS) joined Reed to introduce the bill.

“It’s unfair for taxpayers to foot the bill for failed Obamacare exchanges,” Reed said. “Hardworking taxpayers have already funded more than $4.7 billion worth of state-based exchanges, many of which are broken or have already been scrapped altogether. Taxpayers deserve common sense accountability – they can’t afford what has turned into more wasteful spending out of Washington.”  

Reed’s bill seeks to recover any taxpayer dollars spent on abandoned state exchanges. States that abandon their exchanges and defer to the federally run exchange will be required to enter into an agreement with the Department of Health and Human Services (HHS) to repay federal grant dollars over a ten year period.

According to the non-partisan Congressional Research Service (CRS), more than $4.7 billion in federal grants from Health and Human Services (HHS) have already been awarded to establish state exchanges. Maryland, Massachusetts, Nevada and Oregon have spent at least $474 million in federal funds on their unworkable exchanges.

Nevada and Oregon are two of the states that have already announced they will shut down their state exchanges and begin using the federal exchange in 2015. Oregon, just one of the states facing a broken exchange, reportedly spent $248 million to set up its exchange even though it failed to enroll a single private insurance customer online.  

“I’d like to thank my good friend Tom Reed for introducing this much-needed legislation,” said Congressman Steve Scalise. “It seems like every day hard-working taxpayers find out they are paying for another failure of Obamacare. Already, nearly $500 million in taxpayer dollars have been squandered on failed and abandoned state exchanges.  This legislation establishes accountability that has been missing for these failures that result in wasteful spending.”

 “The American people have been repeatedly told that the shortcomings of Obamacare are the result of resistance from Republicans,” said Rep. Black. “This is untrue and the failure of these state exchanges proves that Obamacare will fail no matter who tries to implement it. This commonsense bill simply makes sure that taxpayers aren’t left on the hook for potentially billions in wasteful spending at the state level.”

 “Taxpayers shouldn’t be forced to foot the bill for failed Obamacare exchanges,” said Congressman Tiberi. “Federal grants shouldn’t be a blank check for funding state exchanges. If a state receives grants and then throws in the towel, they should be held accountable and repay the government – it’s a basic matter of fairness.”

“The failed healthcare exchanges represent half a billion in government waste,” said Congresswoman Lynn Jenkins. “I came to Congress to end wasteful government spending and give hardworking American taxpayers the respect they deserve. This legislation would recover their hard-earned dollar and provide greater accountability to rein in this Administration’s out-of-control spending.”

Other states including Hawaii, Maryland, Massachusetts and Vermont have spent millions on their exchanges only to encounter significant problems and may also decide to do away with their problematic exchanges in the coming months.

Reed’s bill has been introduced in the Senate by Senators John Barrasso (WY) and Orrin Hatch (UT).


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