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ObamaCare Turns 6 -- $55 Billion In Waste, So Far

(Jovan Williams/IBD)

Health Reform: ObamaCare was supposed to make the health care system more efficient and less expensive. Yet it has flushed tens of billions of dollars down the drain before providing anyone affordable coverage.

The Obama administration plans several events this week to mark the 6th anniversary of President Obama’s signing ObamaCare into law on March 23, with lots of happy talk about gains in coverage and low inflation.

One thing you won't hear about is the massive amounts of waste involved in setting the law up. That story has been told in dribs and drabs over the past six years, so it’s easy to forget how much was involved. So as an ObamaCare birthday present to taxpayers, we decided to add up the big-ticket items.

Insurance Co-Ops: So far, 12 of 23 non-profit insurance co-ops established by ObamaCare have failed. It’s becoming increasingly unlikely that they will ever pay back the $1.2 billion in startup loans they got from taxpayers. With several more co-ops in terrible financial straits, that price tag could easily climb. Overall, ObamaCare shoveled $2.4 billion into these ill-conceived co-ops.

State-run exchanges:  ObamaCare awarded a total of more than $5 billion in grants for states to set up state-run exchanges. About $729 million went to dozens of states that decided against building an exchange; $778 million went to exchanges that have since failed -- which means $1.5 billion was simply flushed down the drain. How much of the remaining grant money was wasted is unclear, but a Government Accountability Office audit last fall did find that not one of the remaining 14 state-run exchanges is fully functional.

Healthcare.gov: After spending more than $2 billion to construct Healthcare.gov, it failed at launch and is still unfinished. Although it was supposed to be self-financed, Obama wants an additional $535 million to keep it running next year.

Insurance bailouts: This year, the Obama administration announced that it was diverting $3.5 billion meant for the Treasury to insurance companies to help cover losses suffered from ObamaCare. Republicans think this might be illegal, but in any case, it’s money that wouldn’t have been spent if not for ObamaCare.

Improper subsidies: A report from the Senate Homeland Security and Government Affairs Committee found that by June 2015, ObamaCare had handed out $750 million in subsidies to more than half a million people who weren’t eligible for coverage when they couldn’t verify their citizenship status.

IRS costs: Because ObamaCare relies so heavily on the IRS to implement its massively complicated insurance subsidy scheme and insurance mandate penalties, the IRS had to spend $881 million to get systems and personnel in place to handle the job.

Paperwork burdens: An analysis by the American Action Forum concluded that businesses and individuals have spent 165 million hours to comply with ObamaCare’s 106 new regulations. In dollar terms, that works out to $45 billion.

Add it all up and it comes out to $55 billion. And that’s being generous to ObamaCare. This figure doesn’t count what families forced off health plans they liked had to pay in to buy ObamaCare’s overpriced insurance. Or the adverse impact ObamaCare has had on the labor market. Nor does it count the vast amounts of waste and fraud in Medicaid before ObamaCare vastly expanded eligibility.

Yes, it is true that ObamaCare has expanded insurance coverage. But when you consider the vast amount of waste and inefficiency it has added to health care, to say nothing of the enormous costs of its Rube Goldberg subsidy scheme, there is no question that the country could have achieved those gains at far less expense.

The only thing to celebrate about ObamaCare’s 6th anniversary is that -- God willing -- it will be its last.