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State Insurance Websites Are Costing Federal Taxpayers $1 Billion

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WASHINGTON (CBS DC) – Healthcare.gov isn’t the only website facing problems in the health care reform rollout.

There are also issues in websites some states have set up to enroll people in insurance plans under the Affordable Care Act.

A CBS News analysis shows that the 15 states that opted to set up their own exchanges are spending more than $1.1 billion to launch and implement their own websites, often paying the same government contractors to do the same job in different states.

CBS News Correspondent Jan Crawford reports that money is being paid for by the federal government, courtesy of taxpayers, and some are still struggling to get off the ground.

With HealthCare.gov unusable for most, administration officials have pointed to efforts in the states and called it a success.

Health and Human Services Secretary Kathleen Sebelius said, “They are eager to enroll folks and that that is going smoothly.”

California has dedicated $359 million, while New York is spending $161 million. In Kentucky it’s $100 million, and in Oregon the price tag is $50 million.

The president has pointed to Oregon, which has enrolled 56,000 people in Medicaid – to argue things are working. “That’s 56,000 more Americans who now have health care,” the president has said. “That doesn’t depend on a website.”

And it’s a good thing, because Oregon’s website doesn’t work. The new Medicaid enrollments came through the mail. The state website has yet to enroll a single person.

Clay Johnson, a former member of President Obama’s technology team, said, “What we’ve done is we’ve created systems that enable this level of waste.”

Johnson blames federal rules that favor large government contractors who win out over and over, such as CGI that won bids in five different states to help develop their websites.

CGI is the same company now under fire for its role as lead contractor for the federal website.

Johnson said, “If CGI Federal had contracts with five different states, something tells me that they got paid five times for some of the same code.”

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