Standing Up the ACA Insurance Exchanges: Why a UK Firm?

July 15th, 2013 at 7:05 pm

Please don’t revoke my globalization card nor do I mean to sound too jingoistic…nor is it that big a deal.  But can’t we pay a US firm $1.2 billion to set up the insurance exchanges for the Affordable Care Act instead of a UK firm?

Certainly there are US contractors who specialize in the kind of intake and evaluation that will be required to determine eligibility, subsidies, and so on of the folks who shop for coverage in the exchanges.  In fact, a number of these companies are already working with the feds to get the exchanges up and running.  And that apparently is the hitch:

In the last six months, federal health officials expressed concern that companies already working with exchanges could have an unfair competitive advantage because they had access to nonpublic information about how the government was setting up its eligibility and enrollment system.

I don’t get it.  Why is that a big deal?  In fact, I think I’d want to architects of the exchanges to have such “inside” information; this isn’t the stock market.  Moreover, while the British firm that got the contract, Serco, has lots of experience with US government contracts in defense, intelligence, and air traffic control, they lack experience in running insurance marketplaces.

Like I said, not a big deal that they’re Brits–Serco has an established American unit and of course they’ll be hiring subcontractors here to do the work.  But this took me back to my days of being a White House economist helping to implement the Recovery Act.  Folks couldn’t understand why under certain programs the US government would buy materials like wind turbines from abroad, when we had such weak labor demand here, which of course was the target of the stimulus.  And those folks had a point.

Again, this is different, since the work will be done by folks on our shores.  Oh, and note that they’re going to need to hire 1,500 workers to staff the project–so tell me again how the ACA is a job killer

But I still think the administration should have given this contract to a US firm.


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5 comments in reply to "Standing Up the ACA Insurance Exchanges: Why a UK Firm?"

  1. hipparchia says:

    i’ve got an acquaintance who used to work for one of the u.s. companies companies that does this. they’re still technically a u.s. company, but they’ve been outsourcing more of their jobs to india in recent years.

  2. save_the_rustbelt says:

    I thouht Obama would at least assemble a corp of competent technocrats throughout the cabinets, but apparently the only competent technocrats are those in charge of spying on US citizens

    Ghastly lack of performance.

  3. The Raven says:

    Guy, the US wealthy don’t want to do any actual work. You know this.

    Besides, Serco can sue critics in under British law, a terrifying fate, or at least one that will make criticism difficult.

  4. Fred Donaldson says:

    The American wealthy want to buy services as cheaply as possible. The American poor supply them.

    No wonder, the wealthy want services cheaper than the American poor can provide, and go overseas, and the American poor want to provide services at prices that won’t perpetually keep them poor, but have nowhere else to go to sell their services.

    A capitalist country promotes the accumulation of immense wealth and a democratic country promotes the public good. The conflict today seems leaning to the owners of capital, not the producers (workers).

    Our odd connection to the UK started in World War II’s aftermath, when we supplied atomic bomb technology to them and nobody else (including France), and there is some weird cricket and rugby atmosphere that continues today at some U.S. prep schools, as some emulate a culture that we once fought to escape in the 1870s and 1880s.

    Today, I watched a cable tv anchor broadcasting from London in anticipation of a birth, while that same network seemed to condone the starvation of millions of American babies by reducing the SNAP program. The same network sends nobody to Syria or Russia, where there is real news, not monarch deliveries.

    The economics of having the jobs here in the ACA promotions are nice, but any time a foreign company makes a profit here, it less money for our national account. Just think, that if all the businesses were owned overseas and all the profits went there, would it just affect balance of trade and GDP, but would it eliminate most of our total wealth potential as a nation?

  5. Stephen Plee says:

    Surely It was a humiliation for US firms, but when you want to save your money, well the cheap service the better.