After spending $204 million in federal grants on a health care exchange that doesn’t work as required, Hawaii’s Health Connector is going to be investigated by the GAO, at the request of a Republican, State Senate Minority Leader Sam Slom. So far, only 8,000 people have managed to sign up on the site, working out to over $25,000 per enrollment. Even worse, the site does not perform an essential function. The Hawaii Reporter:

One of the major problems is the Connector isn’t integrated with the Medicaid system, even though Hawaii’s enrollment process requires consumers to be screened for Medicaid eligibility before seeking coverage, Slom said.

Slom, by the way, was the only Hawaiian legislator to vote against establishment of the state exchange.

The exchange is now poised to become a continuing drain on Hawaiian taxpayers:

 The exchange is supposed to be self sufficient by the end of 2014, but since enrollment is so low, the 2 percent tax on every transaction doesn’t cover the exchange’s operational costs, Matsuda told lawmakers. The exchange expected at least 50,000 people to enroll.

A sizable portion of the $204 million grant is going to CGI Corp., which received a $74 million contract to develop and maintain the Connector website.

However, the site has experienced a number of technical problems and delays. Because of similar problems, Slom noted the federal government and other states that had contracts with CGI Corp. cut ties with the vendor.

Slom has a list of issues for the GAO to investigate:

Slom wants the GAO to investigate:

• How the $204 million Hawaii received in ACA grants has been spent.
• Whether the payment of a large portion of the federal grant to CGI Corp. for a product that continually fails to fulfill the requirements for a state health exchange website can be considered an abuse of federal funds.
• Why the Connector has failed to publicly disclose all copies of Hawaii’s grant applications related to the establishment of the exchanges.
• Why the Connector has failed to publicly disclose Hawaii’s contingency plan, which was due Jan. 15, 2013, and was required by the Centers for Medicare & Medicaid Services.
• What additional costs were incurred because of the failure to plan for the integration of Hawaii’s Medicaid system into the Hawaii Health Connector and CGI Corp.’s failure to anticipate or incorporate this issue into HHC’s exchange website.

Slom said taxpayers and legislators should be outraged by the Connector’s lack of planning and money management.

Indeed they should. Yesterday, Presdient Obama castigated Republican governors who declined to set-up state exchanges. Hawaii would be a lot better off if it had declined to instigate this mess.

Hat tip: Peter von Buol