A rush of Obamacare spending, public and private

A Maximus call center in Edinburg, Texas.

Dan Mendelson is CEO of Avalere Health.

The federal government is relying on an army of contractors to turn the 900-plus-page health care reform law into reality. Maximus, headquartered in Reston, Va., is one of them. 

Maximus is hiring nearly 4,000 customer service representatives to staff eight call centers around the country. The workers will answer questions about the new online exchanges, which will sell health insurance. But Maximus is getting other business from the health care overhaul, according the head of the company's health services division, Bruce Caswell.

"When the Affordable Care Act first passed, we took the opportunity to look at what new opportunites were created for the company," Caswell says. 

Maximus is training workers to help with the Medicaid expansion under health care reform, and it’s also doing some information technology work. Altogether, Caswell says, government health care reform contracts will contribute more than $200 million to his company’s bottom line over the next fiscal year -- 13 percent of its total revenues. 

But the government isn’t the only one spending money to implement the Affordable Care Act. 

“Spending by private industry and by hospitals will ultimately dwarf what the federal government is spending on administrative costs," says Dan Mendelson of Avalere Health, which tracks health care expenditures. Mendelson says health care reform requires hospitals to computerize patient records and hire extra staff to comply with mandates for improved care.

The total amount being spent on the private side to implement health care reform is hard to calculate, because so much money is being spent so quickly, according to Len Nichols, a health economist at George Mason University. 

“I don’t know that anybody’s got a price tag on it, but I can assure you it’s a large number," he says. "I’m sure it’s billions.”

Nichols says that includes advertising by insurance companies marketing the policies they’ll be offering on the exchanges. We’ll start seeing those ads after Labor Day. 

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.

A Maximus call center in Edinburg, Texas.

Dan Mendelson is CEO of Avalere Health.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...