Just one week into office, the Trump administration cost taxpayers more than $1 million in a botched attempt to curtail advertising efforts for Obamacare, a government watchdog has found.
The attempt came just five days into the new administration, when the so-called beachhead team at the Department of Health and Human Services (the individuals who effectively took over the agency following the presidential transition) began imparting instructions to the remaining career staff.
According to a little-noticed report from the Office of Inspector General at HHS (PDF), on the morning of Jan. 26, the beachhead team instructed staff at the Office of the Assistant Secretary for Public Affairs at HHS to cancel all marketplace enrollment outreach for the remainder of Obamacare’s fourth open enrollment period.
HHS staff had expressed concern over such cancellations, the report noted. Before Trump had formally took office, officials had briefed his team that ending outreach would “result in roughly $5 million in unrecoverable costs and $4 million in costs recoverable without penalty.” They also noted that “outreach close to the deadline would be critical to enrolling young and healthy consumers.”
But when the order went out to cancel the contracts, both career staff and a member of the beachhead team “understood these initial instructions to apply to all Marketplace outreach being conducted,” the IG report noted. That evening, a contracting officer “emailed letters of partial termination to Weber Shandwick and Elevation that instructed the contractors to immediately cancel all outreach related to the fourth open enrollment period.” (Emphasis ours)
By then, the report noted, members of the beachhead team had already begun changing their mind. According to records obtained by the IG office, career staff reiterated their concerns about non recoupable costs and the damage that could be done to the Obamacare marketplace if all outreach was ended. The beachhead team put together a revised set of instructions “to cancel only certain outreach activities and indicated that the goal was to save money.”
But it came too late. It would take until the next morning for the updated set of instructions to be sent to Weber Shandwick and Elevation about which Obamacare outreach HHS wanted to nix and which one it wanted reinstated. By then, the contractors—who were tasked with broadcast and digital advertising as well as supporting the government’s own outreach efforts—had already acted upon the earlier instructions.
Obama administration officials often complained that they had little interaction with the teams that were to succeed them, making it hard for there to be a smooth continuation of governance. The Trump administration often publicly dismissed these concerns. And when the news came down that they were pulling Obamacare outreach advertising, they pitched it as a long-thought-out cost saving measure.
“The federal government has spent more than $60 million promoting the open enrollment period,” a spokesman told Politico. “HHS has pulled back roughly $5 million of the final placement in an effort to look for efficiencies, where they exist.”
In reality, the administration—whether through miscommunication or an unintended misstep—had burned money that they couldn’t recoup.
“Weber Shandwick estimated that the dollar value of outreach that it had already canceled, before receiving the updated instructions, was approximately $1.1 million in costs that could not be recovered for HHS,” according to the IG’s findings. The outreach that Elevation had canceled was all recoverable.
A request for comment made to the Trump administration and HHS was not immediately returned.