October 27, 2013

HealthCare.gov’s Mounting Costs, Part 2: Don’t Forget HHS’s Internal Costs

The left has been ridiculing supposedly wildly overstated estimates of the costs of building the calamitous HealthCare.gov website, the fact is that the costs involved are certainly far higher than the figures most commonly cited: “over 500 million” at Digital Trends, “over $400 million” at the New York Times. The Washington Post’s Glenn Kessler is claiming that it’s really only $170 milion to $300 million.

In Part 1 (at NewsBusters; at BizzyBlog), I noted that Bloomberg Government’s Peter Gosselin estimated that costs incurred and costs committed to outside firms alone are already north of $1 billion. Now let’s look at how much additional taxpayer money the Department of Health and Human Services may have spent on the Obamacare exchange rollout.

Page 312 of “Centers for Medicare & Medicaid Services, Justification of Estimates for Appropriations Committees” shows the following ACA-related count of full-time equivalents for each of the past three and the current fiscal years:
- FY 2011 — 129
- FY 2012 — 271
- FY 2013 — 483
- FY 2014 — 524

The dollar amounts at the link are hard to follow, and appear to be of little value. Many items have no dollar amount identified. Others are described as “such sums,” probably meaning either “whatever it takes” or whatever we are allocated.”

The sum of all four years’ full-time equivalents is 1,407. At a very conservative $120,000 for each FTE’s salary, benefits, and associated costs (e.g., office space, computers, office supplies, etc.), that’s a four-year total of $169 million, a large majority of which appears to be tied to HealthCare.gov’s and the other state exchanges’ rollouts. In fiscal 2013, 371 FTEs were dedicated to two key line items of the Act which would be related to HealthCare.gov (1311 and 3021). A rough four-year  spending number might be about $120 million, on top of the $1 billion-plus identified in Part 1.

There will surely be additional personnel-related costs over and above more money going to contractors thanks to President Obama’s recently announced “tech surge.”

All in all, a total tab of $1.5 billion is hardly out of the question.

As noted in Part 1, the establishment press has ignored the work published by Bloomberg’s Gosselin. I guess nailing down cost only matters when it’s incurred in a Republican or conservative administration on items the left doesn’t like.

Cross-posted at NewsBusters.org.


1 Comment

  1. [...] The first is that the amounts spent on or committed to contractors far exceed even the $634 million originally reported. That news arrived late this week via Peter Gosselin, and is addressed below. The second is the cost of additional government employees hired, which I will get to in Part 2. [...]

    Pingback by BizzyBlog — October 27, 2013 @ 5:21 pm

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