HHS nominee wants back money wasted on state health exchanges

Sylvia Mathews Burwell vowed to recoup federal money misspent by state governments on their health insurance exchanges created as part of the Affordable Care Act. Sylvia Mathews Burwell vowed Wednesday to recoup federal money misspent by state governments on their health insurance exchanges created as part of the Affordable Care Act.

Sylvia Mathews Burwell, President Barack Obama’s nominee to run the Department of Health and Human Services, promised to recover any federal funds misspent in building the state health insurance exchanges as part of the Affordable Care Act.

During her confirmation hearing Wednesday before the Senate Finance Committee, Burwell said the federal government would push to recoup funds from any of the 14 state-run exchanges that misused them.


“Where the federal government and the taxpayer has had funds misused, we need to use the full extent of the law to get those funds back for the taxpayer,” said Burwell, a former Wal-Mart executive who currently serves as director of the federal government’s Office of Management and Budget.

The 14 states — including the District of Columbia — who opted out of the federal government’s solution saw a variety of outcomes related to their health exchanges. Some, including Connecticut, Colorado and Kentucky, have generally been considered successful.

In contrast, the systems in Massachusetts, Oregon, Maryland and Nevada have faced public struggles, having spent at least $474 million in federal funds on their exchanges combined. Oregon has already thrown in the towel, announcing it will fully move to the federal exchange for this year’s enrollment period as it’s more cost-effective than fixing its own system. Massachusetts recently announced it would temporarily go to the federal exchange while it implements a costly repair job on its portal.

States have until Nov. 15 to make changes to their portals before the second round of open enrollment begins.

Sen. Orin Hatch, R-Utah, proposed a bill Wednesday morning, along with Wyoming Republican Sen. John Barrasso, that would require states that abandon their own exchanges for federally run marketplaces under to repay all federal funds for the failed projects.


Another issue brought up regarding the exchanges centered on future funding. Hatch asked Burwell if the federal government would approve more spending for struggling exchanges.

“One, we have to understand what went wrong. Two, when we do understand that, as I said, we need to go to the full extent of the law, if there are contractors or others who have misled,” Burwell responded. “And three, I think we need to make sure that we both learn from the mistakes of the exchanges that aren’t working and learn from the exchanges that are.”

Burwell also testified before the Senate Health, Education, Labor and Pensions Committee last week. If confirmed, she will replace Kathleen Sebelius, former governor of Kansas who led HHS for five years before announcing her resignation last month.

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