December 11, 2013 / 10:12 PM / 5 years ago

FEATURE-In Arkansas, crucial Obamacare hub draws little notice

ROGERS, Ark., Dec 11 (Reuters) - In an unmarked building on the outskirts of this old railroad town, hundreds of workers are going about the unglamorous work of expanding the United States’ social safety net.

From morning until midnight, clerks here type up the names, Social Security numbers and other personal details of those who have filled out paper applications for health insurance under President Barack Obama’s Affordable Care Act.

From the outside, there’s no indication that the workers in the three-story brick building are carrying out an increasingly crucial part of the healthcare overhaul known as Obamacare.

But as the Obama administration tries to recover from the disastrous debut of the website that is supposed to enroll millions of Americans in health coverage, its call for frustrated Americans to enroll the old-fashioned way - on paper - have made this building in Rogers, Arkansas, one of the most important cogs in the president’s signature domestic achievement.

The White House still plans for most uninsured and under-insured Americans to sign up on the website, but it estimates that about 1 in 3 applications - as many as 6 million by the end of March - will be done on paper.

As of the end of November, consumers had submitted about 230,000 paper applications, about 20 percent of the total, the U.S. Department of Health and Human Services said on Wednesday.


It isn’t cheap to process all that paper.

Through the end of October, the administration had agreed to pay $202 million to Serco, the international conglomerate that handles the documents for the 36 states that have not set up their own insurance exchanges. That was more than the $174 million the government had spent on the website at that point.

By the time the contract expires in 2018, the U.S. government could pay Serco as much as $1.2 billion - nearly twice what it expects to eventually spend on the website.

For Rogers and three other small cities in the middle of the United States, that spending has an upside.

Since the U.S. Centers for Medicare and Medicaid Services(CMS) awarded Serco the Obamacare contract in July, the company has created more than 3,000 clerical and data-entry jobs in small cities where an office job that pays $10 to $13 an hour with limited benefits is considered a livable wage.

The company ultimately could hire up to 10,000 people for the work, a company spokesman told the Arkansas Democrat-Gazette in October.


Serco has set up four facilities to handle paper applications for Obamacare coverage. Paper forms are mailed to a facility in London, Kentucky, where they are converted to an electronic format and sent to offices in Wentzville, Missouri, Lawton, Oklahoma, and Rogers, a city of 57,000 in northwest Arkansas.

Workers at those sites enter information from the scanned images into the same computer system that underpins, to verify applicants’ identity and determine whether they are eligible for government subsidies to help them pay for coverage.

The Serco workers undergo a background check and are not allowed to access the Internet or use mobile phones while on the job as part of an effort to protect consumer privacy, CMS said.

In a matter of months, Serco has become one of the biggest employers in a thriving economy in the Rogers area that is anchored by the corporate headquarters of Wal-Mart Stores Inc., JB Hunt Transport Services and Tyson Foods.

Serco hired about 600 workers in Rogers in August and brought on another 1,000 at the end of October, according to local officials.

“There’s a lot of people who are going to have a better Christmas this year because Serco located in northwest Arkansas,” said Michael Harvey, chief operating officer of the Northwest Arkansas Council, a business-development group.

Serco keeps a low profile in Rogers.

There’s no logo in front of the building that houses its operations, though security guards are quick to intercept visitors to the property. Employees smoking cigarettes at the edge of the parking lot on a recent day said they have been told not to speak to the media. A company spokesman did not respond to several requests for comment.


Rogers isn’t necessarily desperate for jobs.

New hotels, shopping centers and gated developments attest to the prosperity that has come with Wal-Mart’s explosive growth. The unemployment rate in Rogers was 5.4 percent in August, nearly two percentage points below the national figure. Local officials say the 2007-2009 recession felt more like a pause in the long boom that has more than doubled the region’s population since 1990.

Nevertheless, officials say Serco has filled an important gap by providing jobs for lower-skilled workers who had been relegated to minimum-wage jobs during the recession. They hope that the company will use the facility for other jobs once the Affordable Care Act work slows down.

“I’ve talked to a number of different folks who’ve accepted jobs and gone to work for Serco - they seem to be very happy,” said Rogers Mayor Greg Hines.

Though the company appears to be widely admired in Rogers, its mission is less popular. Obama lost northwest Arkansas to Republican Mitt Romney by 32 percent to 66 percent in the 2012 presidential election, and many residents view Obamacare - which seeks to help more than 30 million Americans with little or no insurance and sets minimum standards for all types of coverage - as a costly experiment in social engineering.

That has required the area’s politicians, overwhelmingly Republican, to balance their support for the economic benefits Obamacare has brought to the area with their opposition to the Democratic president’s healthcare program.

“If America is going to continue to be placed under something as flawed as the Affordable Care Act, then at least if there are going to be jobs created by it, let’s put some of those jobs in northwest Arkansas,” said Republican Representative Steve Womack, who was mayor of Rogers before he ran for Congress.

Arkansas state Senator Bart Hester says he believes that Obamacare will saddle future generations with debt, but that it also has led at least one new Serco worker to move into an apartment building he owns in the Rogers area.

“The rental market’s very good here. If you have 1,500 people moving to town it’s only going to get better,” Hester said. “You won’t see me on Twitter bashing Serco.”

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