A Third of Obamacare’s Federal Exchange Contracts Are Already Over Budget

Earlier this summer, the Government
Accountability Office reported that, all told,
HealthCare.gov—Obamacare’s federally run insurance exchange
system—has
cost about $840 million, with more expenses on the way as an
army of tech contractors and the federal government continue to
work slowly toward completion. 

Now, thanks to the Office of the Inspector General (IG) at the
Department of Health and Human Services (HHS), we have some more
detail on the costs and contracts associated with building the key
technological infrastructure for the law. 

According to the
report, which was released today,the total value of the 60
contracts associated with the build out of HealthCare.gov is about
$1.7 billion, with contract values ranging from as little as
$69,000 all the way up to about $200 million.

Those values could end up higher. In a footnote, the report
explains that these are expected values, and that they could be
more if “modifications” are made to the scope of work in the
contracts. 

Given the state of the federal government’s exchange, and the
delays and cost overruns it has seen so far, it seems likely that
the actual costs will end up being higher. Of the 60 contracts, 20
had already gone over budget by February of this year, according to
the IG report. Seven of those 20 were over budget by at least 100
percent.

The back end of the exchange, which handles critical financial
transactions between the government and the insurance industry, was
supposed to be complete last year, then delayed until January of
this year, then delayed further, and now isn’t expected to be
complete until sometime in 2015.