Republicans complain about wasteful spending on healthcare law

By Ramsey Cox - 09/28/12 04:49 PM ET

Sen. Chuck Grassley (R-Iowa) and Rep. Fred Upton (R-Mich.) accused the Department of Health and Human Services on Friday of waste and inadequate oversight following reports that state grant money was used for Hollywood contracts to promote the healthcare reform law.

Grassley and Upton expressed concern in a letter to Health and Human Services (HHS) Secretary Kathleen Sebelius over an unlimited budget and little accountability for federal dollars to help states establish healthcare exchanges under the Affordable Care Act.

“HHS has failed to provide substantive guidance to states on how the money is to be used,” Grassley and Upton wrote. “Unsurprisingly given these facts, news reports have shown how states have engaged in questionable contracts with taxpayer dollars. ... Ensuring proper use of American taxpayer dollars is of the upmost importance, and we trust that you share our concerns.”

Under the Affordable Care Act, states were required to submit plans for healthcare exchanges to receive funding or else HHS would provide them for the states. Grassley and Upton said more than $1 billion has been awarded to date to 33 states, and revelations of questionable expenses, such as a public relations contract in California to promote the healthcare exchanges on television shows including “Grey’s Anatomy” and “Modern Family,” continue to surface.

“Americans’ hard-earned money should not be taken by government to subsidize Hollywood and insert propaganda into the popular culture,” Grassley and Upton said. “It should be going toward ensuring that the cost of healthcare is being lowered for all Americans.”

The lawmakers said they were especially concerned of wasteful spending because of the record deficit and the planned sequestration cuts.

“As our government faces sequestration with the potential for $1.2 trillion indiscriminately cut from the federal budget, unlimited money is flowing from your agency to establish American Health Benefit Exchanges with little or no restrictions and accountability,” the congressmen wrote.