Obamacare Contractor With $1.2 Billion Deal Pays Employees to Do Nothing

On September 26 of last year, just days before Obamacare's health insurance exchanges were set to open nationwide, the Obama administration quietly made an unusual decision to expand its contract with Serco, a health care data entry company.

The company's existing $114 million deal, which called for the company to process 6.2 million paper health coverage applications under the law, was topped off to the tune of an additional $87 million. The company had already promised to hire 2,000 workers to fulfill its contract duties. The added funds would probably mean hiring even more.

Why would the Obama administration, on the verge of launching a nationwide system for online insurance sign-ups, decide to spend so much more money on paper processing at such a late date? A few days later, the likely answer became clear: Practically speaking, the federal exchange system covering 36 states didn't work at all. It took another two months to get the system online and usable for most customers, during which time Serco could presumably process whatever paper applications came in.

But by December, the consumer face of the federal exchange was operating relatively smoothly. Not every problem was fixed, especially on the insurer end, but consumers who wanted to submit electronic applications could generally do so.

Serco, meanwhile, kept manning its paper processing centers. Indeed, it still is. But according to one processing center employee in Missouri, nothing is happening. Nothing ever happens anymore.

"The main thing is that the Data Entry side does not have hardly any work to do. They're told to sit at their computers and hit the refresh button every ten minutes—no more than every ten minutes. They're monitored to hopefully look for an application." the unnamed employee told KMOV-TV in St. Louis. "Their goals are set to process two applications per month and some people are not even able to do that."

It's always good to have something to hope for. Maybe one special day hitting that refresh button will actually pay off, and an application will appear, as if by magic. But for now this sounds like the Waiting for Godot of government contractor jobs. At this point, with Obamacare's open enrollment and special enrollment periods closed, the trickle of new paper applications has to be pretty thin. But Serco gets paid for every worker on the clock, so workers keep showing up and hitting the refresh button every 10 minutes—but not more often than that.

When stories about tax-funded workers who don't do any work show up in the media, there's often a partially-in-jest debate amongst libertarian types: Considering the alternative—that they do something that contributes to government's problems—isn't it better that they sit around and do nothing? In this case, because Serco's data staff aren't government employees, there's an even better alternative: Cancel the contract and stop paying for outside services that clearly aren't needed. The company's Obamacare contract is worth at least $1.2 billion over the next decade, according to The Washington Post, and its British parent company has been in trouble for shady practices before, when an investigation found that it had overbilled the U.K. government by "tens of millions of pounds." Sounds like, contrary to the Obama administration's approach, we could use less of Serco's services rather than more.