State has yet to reveal hidden costs associated with failed Maryland Health Benefit Exchange website

BALTIMORE - Maryland Lt. Governor Anthony Brown considers his leadership of the Maryland Health Benefit Exchange a success.

He has touted it on television, his website and the campaign trail.

The Democratic gubernatorial candidate said he helped link 340,000 residents to health insurance, fired necessary healthcare exchange leaders and produced a new enrollment plan for signups later this year.

One thing he hasn’t touched on clearly was the exact cost of the failed health care exchange.

With an estimated price tag of $130 million, details into how every cent of that money was spent still remains muddled, buried behind black marker and complicated budget forms.

In a public information request submitted by ABC2, a reporter asked to look at the 14,000-page audit in the hopes of understanding the breakdown of the exchange’s cost on everything from print copies to consultation fees.

What was returned was a document blacked out, with many cost estimates and explanations redacted.

The lack of details has many open policy experts and political candidates appalled that current leaders are not telling the public the whole truth behind the healthcare exchange debacle.

Lack of Transparency

Alison Walker, spokesperson for the Maryland Health Benefit Exchange, said the organization is still researching why the information was redacted in the audit.

In a 23-page budget narrative of the exchange sent to the Center for Consumer Information and Insurance Oversight – a federal committee tasked with implementing reforms to the Affordable Care Act – documents show that officials estimated that operating costs would be around $123 million.

Through the breakdown, about $33 million of the funding was listed. This included costs associated with rent for office space, office equipment and salaries of employees.

The remaining $119 million was redacted, including costs associated with consulting fees, graphic design services and call center needs.

Walker said that the budget narrative is now being modified substantially, so it will not track actual spending in the future.

A look at the budget narrative can be viewed here

Brown’s campaign manager Jerid Kurtz said they would not comment on the health benefit exchange or the costs associated to it.

A spokesman for Dr. Joshua Sharfstein, director of the Maryland Department of Health and Mental Hygiene, also would not comment, stating the health care exchange officials handle all media requests. Sharfstein is listed as the chairman of the board of trustees of the exchange.

Instead of an itemized list, health officials did provide a general spending breakdown on how funding was spent.

Of the $130 million used to get the exchange running, $90 million went to technology services.

Other expenses included salaries ($6.4 million), advertising ($6.2 million), additional consultants ($3.2 million) and training ($3.3 million).

The state also spent $5.8 million on other costs, including communications, rent and office supplies.

About 92 percent of the money came from federal funding while the remaining cost came from the state’s general fund.

Del. Heather Mizeur, Democratic candidate for governor, said the redacted audit has made it hard for state legislators to explain what went wrong to their constituents, many of whom had questions when the exchange failed the first day of open enrollment.

“Here you have thousands of uninsured residents unable to sign up and you can’t explain why,” she said. “I saw in on those committee hearings and was concerned on why so much of it was redacted.”

Mizeur, who sat through the auditing process, said the lack of transparency is a sign that new leadership is needed for Maryland and that includes accountability.

“If I were in charge of this, residents would know exactly where that funding was spent,” she said. “Hiding the problem is not the answer.”

Reforming the law

Jennifer Bevin-Dengal, president of the Maryland Chapter of Common Cause, a public advocacy group, said the lack of accountability by public officials can lead to a growing distrust among voters.

It can also lead to apathetic residents and low voter turnout. Local polls predict Brown will win the Democratic primary next Tuesday.

“When you are only present with half of the information, people get a sense that leaders are making bad decisions,” she said. “It gives the illusion that a lot of backroom deals are going on.”

Dengal said it’s becoming more common for state agencies to release a document, but not present the whole picture.

“It’s like you’re getting what you want, but not completely,” she said. “It just leads to more questions, more back and forth.”

Dengal’s organization is working with the Maryland General Assembly to come up with better laws to make government more accountable.

In the last session, officials heard legislation to study to examine whether it would be feasible to create an oversight committee to appeal public information requests.

Plans are also in the works to standardize fees associated with a public information

request.

Next steps, more costs

In April, the state hired Deloitte Consulting  to oversee the exchange’s replacement of the current exchange program.

The change is expected to cost taxpayers about $50 million.

The health benefit exchange is using Connecticut's model in the redesign.

Cost breakdowns on how the upgrades will go were not immediately available.

Maryland Attorney General Doug Gansler, a Democrat also running for governor, was one of several political leaders to issue critical statements after the changes were announced.

"[April's] decision to abandon a $261 million broken website is the direct result of Lt. Governor Anthony Brown’s failure to fight for the Affordable Care Act. He put spin and posturing ahead of hard work and health care, and the proof is in the pudding: Maryland is more than 130,000 enrollees short of Brown’s own goal, yet he’s called it a success.

"If this is his definition of success, I don’t want to know what failure looks like. Perhaps he should look to President Obama as a model of effective leadership: In the last six months, the President rolled up his sleeves, got the federal website functioning, and spent just about every waking moment asking the American people to buy health insurance. What has Lt. Governor Brown done besides hand out glossy brochures bragging about his leadership?

"Hopefully in adopting Connecticut’s platform, the state will move responsibility to someone else who can finally get the job done. I hope to see more transparency and accountability moving forward, and an accounting of the money already spent."

U.S. Rep. Andy Harris (R-Baltimore County) said he is disappointed about the funding that was spent for the failed exchange.

“As we move forward, I hope that we don’t waste more public money,” he said.

This year, Harris requested a federal investigation into the how the money for the exchange was allocated.

He said as the investigation gets underway, health officials will have to produce proof on how every dollar was spent.

“I anticipate an update this fall,” he said.

Dengal said legislatures are starting the process to making things more transparent.

She expects it to be a bigger issue in the next legislative session.

“People recognize something needs to change,” she said. “I’m glad it’s starting now.”

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