But this is where the corporate welfare of Obamacare kicks in to high gear. Companies, careers, and personal fortunes are being made by people who are consulting the states, as firms bill the individual states millions of dollars for the website and call center set-ups.
Take for example a company called Leavitt Partners, LLC. Founded by the former Republican Governor of Utah (and former U.S. Secretary of Health and Human Services) Michael Leavitt, the company describes itself as a “healthcare intelligence business,” and is focused solely on state-by-state Obamacare compliance (they have already completed Utah’s insurance exchange start-up).
Last month Leavitt Partners representatives traveled north and proposed to build an exchange for their neighboring state of Idaho, a state with a population of less than 1.7 million people and with elected leaders who haven’t yet decided which direction they will take with the federal mandates. Once the Leavitt representatives unveiled their proposed price tag to build an exchange - $70 million-an incredulous member of Idaho’s state insurance task force asked “does Governor Leavitt really believe that this is a good idea?” Company associate Brett Graham replied with the nuanced explanation that “Governor Leavitt doesn’t like the feds dictating to the states,” however, the Governor also believes that the states should “stand inside the circle with the feds rather than stand outside of it” (it’s also noteworthy that while Leavitt is making millions of dollars showing states how to do Obamacare, he also publicly endorsed the presidential candidate who vowed to repeal it – Mitt Romney – and was chosen to oversee the Washington transition team had Romney won the election).
Leavitt’s proposal is not the most expensive that the sparsely populated Idaho has received. The global accounting and consulting firm KPMG weighed-in with a price tag of $77 million, and when a state official asked what the residents of Idaho would get in return for such a large expenditure, KPMG representative Andrew Gottschalk was vague: “It’s hard to explain exactly what you get…It’s hardware, it’s software, there’s infrastructure, there’s people and staffing” he stated. “There would likely be a call center. It’s all kinds of things… there’s a lot of stuff….but it’s hard to be specific.”
States spending millions of taxpayer dollars, and receiving “all kinds of things” and “a lot of stuff” in return. That’s our present-day reality with Obamacare. Along with Leavitt Partners and KPMG, global consulting firms Maximus and Mercer are also cashing-in. These firms employ well educated, highly skilled professionals with JD’s, MBA’s, and advanced degrees in information systems and healthcare management, most of whom would undoubtedly reject the idea that they are welfare recipients. As the Maximus corporate website states, “we leverage our extensive experience and strong commitment to ethics to provide high quality services and solutions.”
Yet the need for finding “solutions” to the federal government illustrates Obamacare’s problem. The fact that states as small as Idaho are even considering spending tens of millions of dollars to employ highly educated “experts” to create new statewide bureaucracies that are in full compliance with the already cumbersome federal bureaucracy demonstrates that government is our problem in the healthcare markets, and not our solution.
Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.