Comment by dangrossman | Hacker News Reader

Comment by dangrossman | Hacker News Reader

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Nobody spent $700M on a website. Over 3 years, the Centers for Medicare & Medicaid Services (CMS) spent $394 million in total to establish and operate the Federally Facilitated Exchanges. That includes building and staffing call centers, media outreach programs, consumer complaint tracking systems, tech support, employer support programs, all the integration and portals for the health insurance industry, integration with a dozen departments of the federal government, administrative staff, etc.

The "Federally-facilitated Exchanges IT" contract awarded to CGI Federal Inc, which is the one that includes building the Healthcare.gov website among other services, was $55 million. The numbers are directly from the Government Accountability Office's report:

http://www.gao.gov/assets/660/655291.pdf

That's still a big number, but it's over an order of magnitude less than yours. It should also be noted that not all of this money is coming from taxpayers. The GAO estimates that in fiscal year 2014, $450 million in fees will be collected from the insurance companies participating in the exchanges, and this money is directly credited to the account used to manage the FFE program.

Nope, both sides are spinning like crazy here. 55 Million is a very old number.

NBC News has released a report on what the actual numbers are. It's $196 Million as of 5/15/2013, and the price appears to be well on its way to $292 Million: http://www.nbcnews.com/video/nightly-news/53309356/

That was five months before the failed launch and the emergency overhaul that's now underway, so it looks like the final number could be even higher.

> It should also be noted that not all of this money is coming from taxpayers [...] $450 million in fees will be collected from the insurance companies participating in the exchanges

The ACA was upheld in the Supreme Court on the basis that it was a tax. Unlike other taxes, which are paid to the government, you will be paying the tax to an insurance provider. They, in turn, will be using the money to partially fund the exchanges. So technically you're correct, but it's just a redirection of tax dollars.

Insurance companies are not required to participate in the exchanges (and many don't). And while people are required to buy insurance, they aren't required to buy it from the exchanges (many will still get insurance via their employers, for example).

Both sides are choosing to use the exchanges rather than one of their alternatives, so the fees paid are user fees, not disguised taxes (unless you consider all user fees disguised taxes, which is a separate philosophical discussion).

I'm pretty sure the tax part upheld by the Supreme Court had to do with the individual mandate. They weren't saying that the insurance companies collect a tax, but rather that if you don't have insurance, the government can collect a tax.

Thanks for the clarification ... I've seen lots of numbers but you're right that it's not really fair to include some of the other services. On the other hand, is the failure of the website making the call centers irrelevant (or otherwise increasing the effective waste)?

I shouldn't have focused on any specific number as I'm really more interested in the huge failure in both the PM and execution of the software project. And I'd like to see contractors that fail miserably on one project removed from the list of companies that the government can use.

EDIT: I've seen a lot of companies create more complex software at a small fraction of that price ... and many of those companies exited well below $55M with smiles on their faces.

I'm pretty sure I could get a team of about 15-20 together for half that price to build it better over the course of a year.

Wait... what company originally wrote the code? I'd like to know.

And I'm assuming said company billed by the hour? And of course, there's no way for the government to claw back the money?

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