California’s Obamacare exchange, which has the largest enrollment in the nation, has opted to increase its budget for its first year in action.
The exchange’s board voted to up the budget set for the 2013-14 fiscal year, bringing the total cost up to $488.6 million for the first year, 22 percent higher than the original $399.7 million budget, according to California Healthline.
The primary culprit is the website and computer system fashioned for the exchange, CalHEERS — the California Healthcare Eligibility, Enrollment and Retention System. The computer system’s cost increased by $112 million over the original projection, according to Yolanda Richardson, the exchange’s chief deputy executive director.
“It’s what allowed Covered California to go online on time,” Richardson told the exchange board.
California’s website and computer system have been more successful than the federal website and haven’t faced the technical issues with which many state exchanges have struggled. But in order to avoid the delays and shutdowns that other states have dealt with, Covered California had to borrow money from other state departments to accommodate its ballooning budget.
The budget increase request was primarily due to “the costs for CalHEERS paid by other departments,” the exchange’s public information officer Anne Gonzales told California Healthline.
California’s budget hike is a sign that the health care law is costing more than advertised, whether successfully implemented or not. California’s not the only state to see higher-than-expected costs, but the focus so far has been on the several states whose exchanges are still not up to par.
Maryland spent $130 million on its exchange by the end of March, but has been forced to give up on fixing its failed website and will start over with a model from Connecticut’s Obamacare website. (RELATED: Maryland Obamacare exchange spent $90 million on technology before abandoning website)
Hawaii’s exchange has spent $204 million in federal funding to sign up just 8,000 people and is already requesting several million more from the state legislature. Oregon’s sign up count is much higher, but virtually all customers enrolled via paper enrollment due to a nonfunctional website.
The independent General Accountability Office is currently investigating the state Obamacare exchanges in Maryland, Oregon and Hawaii to determine whether the struggling exchanges spent their hefty federal start-up grants properly.
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