Healthcare Business News

Oregon plans to ditch exchange in favor of

By Paul Demko
Posted: April 24, 2014 - 7:30 pm ET

Oregon is poised to abandon its problem-plagued insurance exchange in favor of the federal marketplace and its website.

A technology advisory panel recommended the move on Thursday and Cover Oregon's board is expected to endorse that decision when it meets on Friday.

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Oregon’s online enrollment portal has been largely dysfunctional since it launched on Oct. 1. It is the only exchange in the country that can’t process electronic applications.

State officials have blamed many of the problems on its lead contractor, Oracle, which was paid more than $130 million to lead the development of the online marketplace. But several top exchange officials have also resigned—most recently Chief Operations Officer Triz delaRosa—as pressure mounted over the botched technology project.

The advisory panel considered three options in a report on how to proceed for the 2015 open enrollment period: fix the state’s current website, import technology from another state-based exchange or utilize the federal exchange.

An assessment by Deloitte Consulting indicated that it would cost $78 million and require 390 hours of work to fix the state’s website. That was considered beyond the state’s resources.

Transferring technology from another state-based marketplace was also deemed problematic. The report noted that no other state has successfully adopted another state’s technology to date, raising questions about the feasibility of that option.

Switching to the federal exchange would cost only $4 million to $6 million, the advisory panel estimated. The state would continue to process Medicaid enrollments on its own.

The Washington Post reported on Thursday that federal officials are already preparing to take over enrollment operations from Oregon. That report also indicated that two other states with problematic websites—Maryland and Massachusetts—are being closely monitored by federal officials to assess their ability to be ready for the 2015 open enrollment window.

Republicans were quick to point out that the failed technology project was largely funded by federal tax dollars. “Oregon’s decision to scrap its exchange altogether and join the federal exchange means federal taxpayers have lost the $305 million spent on the site,” said Rep. Darrell Issa (R-Calif.), chairman of the House Committee on Oversight and Government Reform. “Going forward, federal officials should insist that Oregon foot the bill for the state’s transition to the federal exchange.”

Follow Paul Demko on Twitter: @MHpdemko

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