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Northwest health exchanges are big money ventures

Nearly a half-billion dollars is 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. Gibson stands in a field strumming her guitar and singing as cardboard trees, clouds on sticks and umbrellas move in and out of frame.

This ad represents the launch of a $10 million marketing campaign to make people aware of Oregon’s health care exchange and urge 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—really, a massive IT project. Oregon has more than $70 million in contracts with Oracle. Washington has a deal with Deloitte that exceeds $50 million.

“There’s a lot of confusion around (this idea that) this is just developing a website, and you can do this from your basement kind of thing,” said Richard Onizuka, CEO of Washington’s Exchange.

Onizuka says the IT part of this undertaking 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,” he said.

Washington and Oregon have created quasi-state agencies to run the exchanges, each with nearly 100 employees and the salaries to match. Washington’s CEO earns $157,000 per year. 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,” he said.

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 Oct. 1.

Since January 2004, Austin Jenkins has been the Olympia-based political reporter for the Northwest News Network. In that position, Austin covers Northwest politics and public policy as well as the Washington State legislature. You can also see Austin on television as host of TVW's (the C–SPAN of Washington State) Emmy-nominated public affairs program "Inside Olympia." Prior to joining the Northwest News Network, Austin worked as a television reporter in Seattle, Portland and Boise. Austin is a graduate of Garfield High School in Seattle and Connecticut College in New London, Connecticut. Austin’s reporting has been recognized with awards from the Association of Capitol Reporters and Editors, Public Radio News Directors Incorporated and the Society of Professional Journalists.