Republican congressmen request a federal probe of Md. health insurance exchange


Prince George's County resident John Hawkins, left, sits with navigator Alima Malungila to help him enroll in the Maryland Health Connection at Laurel High School in October 2013. (Marvin Joseph/The Washington Post)

Two Republican congressmen have called for an investigation of the tens of millions of federal dollars that Maryland spent to build an online health exchange that state officials say has so many defects that they might have to abandon parts, or even all, of it.

Reps. Andy Harris (Md.) and Jack Kingston (Ga.) sent a letter Wednesday to the inspector general of the Department of Health and Human Services and asked for an immediate “formal investigation into the flagrant waste and abuse of taxpayer monies.” The inquiry would focus on how federal money was spent, how contractors were hired, who provided oversight and whether the federal government can recoup any of its money.

Harris and Kingston, both vocal opponents of the Affordable Care Act, wrote that Maryland officials had been warned that the exchange’s Web site was unstable.

“Despite all of these warning signs, Maryland chose to continue to waste and abuse federal taxpayer money by opening up what they knew was a flawed exchange to the public,” the letter states. “Subsequent to the disastrous rollout, additional federal dollars continue to be spent.”

Joshua M. Sharfstein, Maryland’s secretary of health and mental hygiene, has said that although officials expected to encounter problems after launching the exchange, he did not know the gravity of the problems. A spokeswoman for Sharfstein did not respond Thursday to questions about the letter, first reported by the Baltimore Sun.

Maryland is one of 14 states that decided to build their own online health insurance marketplaces, rather than use the federal one. But Maryland’s system crashed on its first day and has been plagued with problems ever since.

Maryland’s enrollment numbers are among the worst in the country. State officials had hoped that at least 150,000 Marylanders would sign up for private coverage plans during the exchange’s first year, but barely 30,000 have done so, with less than two months left in the enrollment period.

The exchange is expected to cost more than $260 million over four fiscal years, Sharfstein said. That estimate includes not only the cost of building the system, but also administrative and operational costs, including salaries. Much of the funding came from the federal government, but Maryland is expected to pick up $47 million of the total cost.

In recent months, Maryland has spent millions extra on additional technical help and call centers to process applications. The exchange has asked permission to spend an additional $33 million this year in federal grant money that had been secured for future years.

More than two weeks ago, The Washington Post submitted a list of questions to the exchange’s chief financial officer, Allan Pack, about the program’s finances and spending. He has not responded.

Sharfstein met with lawmakers Monday and said that Maryland will stick with its own exchange through the first enrollment period, which ends March 31, but that he is evaluating options for the next enrollment period, which starts Nov. 15. He said Maryland could use all or part of the federal exchange or partner with a state with a better-performing system.

That prompted Del. Susan W. Krebs (R-Carroll) to ask what would happen to the millions of federal dollars that Maryland has spent and the millions more that the federal government has promised. Sharfstein said federal authorities are “very aware of the situation” and are expected to “continue to be partners.”

To that, Krebs said: “So the federal government doesn’t mind continuing to put hundreds of millions of dollars into the state of Maryland’s failed Web site?”

“That’s not what I said,” Sharfstein said. “We all don’t want it to be ‘failed.’ We want a fixed Web site. We will be working with our federal partners on a strategy to get there.”

The topic came up again at the meeting when Sen. Thomas M. Middleton (D-Charles) asked whether the federal government would continue to share costs of building and fixing the site.

“It’s absolutely the case that they understand the challenges that we are facing,” Sharfstein said. “I don’t think it’s the case that the federal government would fund whatever we want. It’s going to be a joint process like a lot of this has been.”

Jenna Johnson writes about Maryland politics, including the General Assembly, the administration of Gov. Martin O'Malley and the 2014 election.
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