Colorado Obamacare Marketplace Misused $9 Million In Grant Funds

By Thomas Phippen

The Colorado health care marketplace improperly spent nearly $9.7 million setting up the Obamacare health insurance exchange system, according to a report by the inspector general (IG) released Thursday.

Centers for Medicare & Medicaid Services (CMS) gave the state of Colorado $183.7 million in federal establishment grant funding to set up Connect For Health Colorado, the exchange program to implement President Barack Obama’s signature health law, the Patient Protection and Affordable Care Act.

Due to “a lack of adequate stewardship of federal funds,” the Colorado marketplace spent $9,678,635 of the grant funds in unallowable ways, the IG said in the report. For example, the Colorado marketplace spent $171,891 on performance bonuses for senior staff, but didn’t provide documentation of a work evaluation for most of them. When the marketplace did have evaluation forms to present to the IG, the documents weren’t signed.

The bulk of the misused money was spent on contracts that weren’t properly awarded or managed. The IG found that $4.4 million worth of contract expenditures were “inadequately documented.”

For instance, the Colorado marketplace gave out more than $3 million to contractors, but “did not indicate the work accomplished for billed fees” on the invoices. The IG found $478,858 paid to consultants who didn’t note what work they accomplished on the invoice, and $331,375 in consultant invoices that didn’t show how the amounts were calculated.

The Colorado exchange has struggled since its inception, plagued with software issues, enrollment far below estimates, and financial difficulties. Many insurers have withdrawn from the program. (RELATED: 92K Coloradans May Lose Their Insurance This Year Due To Obamacare) 

The Colorado marketplace is a public-private partnership, and is not a state agency. It was created by, and works on behalf of, the state government.

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