Wed July 10, 2013
Northwest Health Exchanges Are Big Money Ventures
Originally published on Tue July 9, 2013 4:47 pm
Nearly $500 million.
That’s how much the federal government has awarded Washington, Oregon and Idaho to create health benefit exchanges. These are the new web portals to purchase insurance under the Affordable Care Act. It’s a costly undertaking that involves six-figure salaries, hefty IT contracts and high-end advertising campaigns.
If a green, talking gecko can sell car insurance, then maybe Portland-based folk singer Laura Gibson can sell health insurance.
Gibson stars in a new ad for Cover Oregon, the state’s health care exchange. She stands in a field strumming her guitar and singing as cardboard trees, clouds on sticks and umbrellas move in and out of frame.
The ad represents the launch of a $10 million marketing campaign to make people aware of Oregon’s healthcare exchange -- and to get people to enroll. Washington has a similar sized marketing contract.
But the ad money is a drop in the bucket compared to cost to create the Exchanges – which are really massive IT projects. Oregon has more than $70 million in contracts with Oracle. Washington has a $50 million-plus deal with Deloitte.
“There’s a lot of confusion around, that this is just developing a website and you can do this from your basement kind of thing,” says Richard Onizuka, CEO of Washington’s Exchange.
He says the IT part of this is very complicated. “Because of all the back-end eligibility determination, income verification, the connections with the health plans. So there’s a lot of other pieces to it that is sort of more involved that just building a website.”
Washington and Oregon have created quasi-state agencies to run the exchanges – each with nearly 100 employees and the salaries to match. Oregon’s CEO earns $181,000 a year, Idaho’s $175,000 and Washington’s $157,000. In fact, Washington has a total of 14 employees making six-figure salaries.
CEO Onizuka acknowledges the Exchange pays higher salaries than Washington’s Health Care Authority. “In order to be able to recruit the best people we could recruit it required paying a little bit more in terms of salary compared to the state system.”
For now the federal government will pick up the tab for the Exchanges. But after 2015, the states must take over. The exchanges are scheduled to open for enrollment on October 1.
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