Saturday, October 26, 2013

The Myth Of The $634 Million Obamacare Website

 ERIC BOEHLERT/Media Matters For America:

When he announced hearings this week into the troubled launch and implementation of President Obama's health care reform, Rep. David Camp (R-MI), Chairman of the House Committee on Ways and Means, demanded to know why "after spending over $600 million" the online health care exchange portal, healthcare.gov, doesn't work properly.
In light of the site's systemic failures, that bulging nine-figure price tag ($634 million, to be exact) has produced endless guffaws within the conservative media, where the figure has been adopted as evidence of a policy debacle.  
"Who pays $634 million and has three years and screws it up that bad?" asked Fox News' Sean Hannity on October 18. Added Rush Limbaugh: "That website, by the way, the original projected cost: $93 million. The end cost: $643 million.  I kid you not."
Wow, $550 million in cost overruns for healthcare.gov since 2010 when the health care reform law was passed?
That's false.
The life of the $600 million figure appears to be the latest example of how misinformation is fermented within the right-wing media and then adopted as quasi-policy by the Republican Party. After all, Rep. Camp is holding a hearing specifically to determine why the government's $600 million health care website doesn't work, even though the site didn't cost $600 million.
The eye-popping $634 million figure was first trumpeted in a piece by Andrew Couts at Digital Trends on October 8. It pointed out that the Montreal-based company awarded the contract to build healthcare.gov, CGI Federal, had received $634 million in government contracts related to health care. (Digital Trends lateramended the article and lowered the figure to "more than $500 million" that was allegedly spent "to build the digital equivalent of a rock.")
Stunned by the bloated figure, Couts noted "Twitter, created in 2006, managed to get by with only $360.17 million in total funding until a $400 million boost in 2011. Instagram ginned up just $57.5 million in funding before Facebook bought it for (a staggering) $1 billion last year."
Conservative commentators loved the report and quickly referred to it as fact.
"As for cash, it appears that HHS spent over $600 million for the online system -- more than it took to get Facebook started," wrote John Sununu in a Boston Globe column, while the Washington Times reported, "The administration hasn't said how much these efforts will cost; estimates indicate the website already has cost taxpayers more than $600 million."
Even ABC News pushed the report, noting "The administration has not provided a final cost of the website, although some estimates place it between $500 million to $600 million."
But the accounting employed by Digital Trends raised some eyebrows even within the conservative media. National Review Online contributor Greg Pollowitz tweeted that the CGI contracts Digital Trends pointed to included work that the firm had done for the U.S. government years before health care reform was actually passed into law.
Glenn Beck's site, The Blaze, also debunked the number. "While the federal website to signup for Obamacare was riddled with errors and had a rocky rollout, it didn't cost $634 million to build," wrote Liz Klimas. Citing an official inside GCI, The Blaze reported the $634 figure "includes all of the company's contracts for a Health and Human Services Department program over the last seven years."
Independently, the Sunlight Foundation estimated it cost $70 million to build the much-maligned website, not $634 million. (Officially, CGI was awarded a $93 million contract for the healthcare.gov job.)
And today in his Fact Checker column in the Washington Post, Glenn Kessler looked at the question of the healthcare.gov cost and concluded, "A conservative figure would be $70 million. A more modest figure would be $125 million to $150 million." Kessler noted that the cost for the entire health care project beyond the website would be "at least $350 million."  
Despite those red flags, the bloated figure has been widely embraced as factual within the conservative press. 
As for the Twitter and Instragram comparisons, they don't make much sense in terms of what those hugely popular and relatively simple social media sites do (swap updates and photos) as compared to what healthcare.gov is supposed to do. Noted Kurt Eichenwald at Vanity Fair regarding healthcare.gov:  "The site is one of the most complicated Web-based undertakings ever envisioned not only by the federal government but possibly by any Internet product provider."
Meanwhile, the $600 million misinformation has created some odd contradictions within the conservative media, where it is still regularly touted. For instance, on October 9, a report posted on Foxnews.com referred to healthcare.gov as the "$93M ObamaCare website."  Yet day after day, Fox hosts such as HannityDana Perino, and Andrea Tantaros ridicule the "$600 million" the government allegedly spent to build its health care exchange website.
And then there's Blaze news anchor Amy Holmes who appeared on CNN on October 21 to discuss the health care controversy. She  said that "the website got over $600 million to be able to be set up." Strange, right? On October 10, The Blaze debunked the "rumor" that healthcare.gov cost $600 million to build. Then eleven days later The Blaze's Holmes told a CNN audience that healthcare.gov cost $600 million to build.
Sifting through the vast range of cost estimates for healthcare.gov, the Washington Post's Kessler suggested, "readers should be wary of many cost estimates uttered by lawmakers." That also holds true for estimates uttered by conservative commentators.
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