Classic Crony Capitalism Around New Healthcare Exchanges

In the attached article, Jeffery H. Andersen at The Weekly Standard explains that as HHS falls farther behind in creating insurance exchanges, cronyism seems to have seeped into the implementation process. This, given the complexity and cost of the “Affordable Care Act” is a huge surprise I am sure to our readers.

For instance, the contractor which was to build the insurance exchanges, was purchased by United Health Group this past summer. This is potentially a gigantic conflict of interest as the information moving through the exchanges will be very valuable to any insurer, such as United Health Group. But the purchase was kept quiet until after the election.

(From the Weekly Standard)

HHS has contracted with a subsidiary of a private health care company to help build and police the very exchanges in which that company will be competing for business. The person who ran the government entity that awarded that contract has since accepted a position with a different subsidiary of that same company. An insurance industry insider (speaking on the condition of anonymity) says that HHS, in an attempt to hide this unseemly contract from public view until after the election, encouraged the company to hide the transaction from the Securities and Exchange Commission.

According to my source (the basis for most of this account), in January, HHS awarded Quality Software Services, Inc. (QSSI) what the Hill describes as “a large contract to build a federal data services hub to help run the complex federal health insurance exchange.” At that time, the director of Obamacare’s newly established Center for Consumer Information and Insurance Oversight (CCIIO) — which the Hill describes as “the office tasked with crafting rules for the national exchange” — was Steve Larsen. Larsen had been the insurance commissioner for Maryland when Obama’s HHS secretary, Kathleen Sebelius, was the insurance commissioner for Kansas, and the two are reportedly close. The CCIIO awarded the Obamacare exchange contract to QSSI while Larsen was the CCIIO’s director, and he played a central role in planning the construction of the exchanges — although it’s not known whether he made the decision to award the contract to QSSI or not.

Click here for the article.