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.