Election protection? Democrats Kill Audit of Connect for Health Colorado

March 27, 2014
Connect for Health CEO Patty Fontneau

Connect for Health CEO Patty Fontneau

DENVER — A state Senate panel killed legislation to audit Colorado’s controversial health exchange prompting concerns the move was aimed at inoculating Democrats from political fallout if mismanagement was exposed during an election year.

“I cannot believe the Democrats put politics so blatantly ahead of taxpayer accountability,” said Rep. Jerry Sonnenberg (R-Sterling) a co-sponsor of the bill.

“It seems to me they are more concerned about their own re-election than protecting Colorado’s tax dollars and personal information,” Sonnenberg said.

The audit would not become public until after the November election, however, the state auditor would have informed Connect for Health Colorado of operation deficiencies months earlier.

“I was shocked,” said Sen. Steve King (R-Grand Junction), also a cosponsor of the audit bill.

“There has been bipartisan support for auditing Connect for Health Colorado from day one because it promotes good government and transparency,” said King, who chairs the Legislative Audit Committee.

HB 1257 was killed by the Senate Health and Human Services Committee Wednesday on a 4-3 party line vote with Democratic Sens. Irene Aguilar of Denver, Linda Newell of Littleton, John Kefalas of Fort Collins and  Sen. Jeanne Nicholson of Black Hawk voting no. However, the measure previously sailed through the House with nearly unanimous support.

Nicholson opposed the audit claiming the exchange had been “extremely transparent in terms of their performance.”

“It’s premature” to audit the exchange because it’s been in existence for less than three years, Nicholson said.

State Auditor Dianne Ray said that her department is currently performing a limited audit of the exchange’s financial transactions, but agreed that the agency would benefit from a comprehensive performance audit. It is deemed “high risk” because of the massive cash pumped in from federal grants.

“I would relate this to the same type of thing when all of the Recovery Act dollars all of the sudden flooded the state and went through different programs. Those programs immediately went into high risk,” said Ray. “We were auditing those programs within the next year.”

The State Auditor’s office uncovered numerous accounting errors in the governor’s energy office, which received a scathing audit for a myriad of problems. The lack of accountability for $252 million in stimulus funds could not justify the green energy program’s existence, that audit said.

The Connect for Health Colorado exchange has already spent more than 56 percent of $177 million in federal grants over the past two and a half years – exceeding its annual budget of $26 million.

In addition to investing in the online health plan enrollment computer system, the exchange has spent millions on salaries and roughly $8 million on marketing, including $46,000 on promotional lip balm and sunscreen, according to Kaiser Health News. The marketing tab is expected to soar to $15 million this year.

The state performance audit rejected by Democrats would have assessed operational procedures, Internet security and employee background checks and ascertained whether the exchange would be self-sustainable by January 2015 as planned.

Connect for Health CEO Patty Fontneau assured the Senate committee that the exchange is on track to be sustainable while charging among the lowest enrollment fees in the nation. She did not mention that the state health exchange board of directors recently rejected her pitch for a 21 percent increase in the fees. Instead, the board told her to cut spending.

Fontneau is also hoping to assess a dollar-per-month fee to every insured Coloradan – even those who have not enrolled in the exchange – to add about $10 million to her coffers, according to Health News Colorado.

The exchange will receive $22.6 million from the Colorado general fund this year and about $16.4 million next year in addition to federal taxpayer funded grants and potential fees.

The exchange set a broad goal of enrolling between 73,000 and 203,000 clients by the end of the enrollment period and has so far registered slightly more than 100,000. However, more than 250,000 people were notified that their health coverage was cancelled because of Obamacare.

Fontneau told the committee their enrollment efforts would be impeded by the audit. Additionally, she said the exchange had been examined by federal agencies through four financial audits that are posted on the Connect for Colorado Health website.

“I’ve been reviewing your website and trying to find those audit reports. I found one,” said Sen. Kevin Lundberg (R-Berthoud), referring to a June 2012-2013 basic financial audit that was posted in November. “So the other three audits are not available?”

“We’ll be happy to make them available. They have all been posted publicly,” said Fontneau, reasserting a claim she made to the House Health, Insurance and Environmental Committee in February.

The audits were not posted on the website, and requests for them generated a response from Fontneau’s office with a link to the June 2013 financial report – and no mention of the other audits.

The exchange has struggled with online computer enrollment glitches, a nearly two-hour wait in lines to receive one-on-one enrollment assistance, and controversies over security. Connect for Health Care director Christa Ann McClure reportedly passed a background check in March 2013, but resigned this month because of publicity about her indictment on charges of fraud and embezzlement from a non-profit agency in Montana.

Comments made by visitors are not representative of The Colorado Observer staff.

3 Responses to Election protection? Democrats Kill Audit of Connect for Health Colorado

  1. Bob Terry
    March 27, 2014 at 11:19 am

    How convenient is this? And the audits finding released after the elections. How can people support the Democrat Party with sleazy in your face tactics as this?

    Ms Fontneau, wasn’t this the same woman, who brazenly asked for a raise? Now, its a fee. Yeah it is only 12 dollars, but too a high a price for incompetence, no accountability, and general overall condescension. Notice, this is a fee, and only the people that pay taxes, will get hit. The rest of the freeloaders, sit back and take.

    These people need to go and go quickly.

    • Greg Crawford
      March 28, 2014 at 5:31 pm

      Dr. Irene Aguilar is the chair of a committee in Connect for Health Colorado. She was also the Chair of the legislative committee that killed the audit. Is this a conflict of interest? What are they hiding?

  2. Brian McFarlane
    March 27, 2014 at 11:49 am

    March 6 2014 … Of 84,881 people who bought insurance through Colorado’s exchange, about 56 percent have so far qualified for federal subsidies to make insurance more affordable.

    March 14 2014… More than 85,000 Coloradoans have signed up for private insurance through Connect for Health Colorado and more than half of those who have enrolled also qualified for tax credits to lower their monthly premiums.

    January 18, 2014 … DENVER — The state agency running the Affordable Care Act says 165,000 Coloradans have signed up for or have been approved for health insurance in 2014.
    Connect for Health Colorado announced the enrollment numbers Friday.
    The agency said 101,730 people have signed up for Medicaid while 63,407 enrolled in private health insurance plans.

    “They’re a little bit fuzzy with their information.” Less than a week to go before the “open enrollment” period…

    Lundburg told FOX31 Denver that 750,000 people in Colorado are uninsured and were expected to sign-up for health insurance though the exchange, but with 112,000 signed up less than a week before the March 31 deadline.
    This article says slightly over 100,000 have signed up.

    NO, no need for an audit.

    Also this article states that the exchange has spent $8M on marketing… the numbers I found are much, much higher than that … According to data compiled The Associated Press from federal and state sources, Colorado is spending more than $21 million in public money to market Connect For Health Colorado. That puts the state eighth nationally on spending to promote new opportunities for health insurance coverage under the Affordable Care Act. This spending started last June.

    NO, no need to audit this … PLEASE.


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