Healthcare Business News

Oregon runs from Cover, opts to go with federal exchange

By Paul Demko
Posted: April 25, 2014 - 5:00 pm ET

Oregon is ditching its problem-plagued insurance exchange.

The board of Cover Oregon voted unanimously Friday to use the federal website for commercial plan enrollments during the 2015 sign-up period.

Oregon's exchange has been a disaster since it launched in October. Despite spending $300 million in federal dollars, the website still lacks the ability to process online applications. As of April 10, just more than 45,000 individuals had enrolled in commercial plans through Cover Oregon.

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A technology advisory committee considered three options for moving forward: fixing the existing state website, adopting technology from another state-based exchange or converting to It concluded that the only feasible option, both financially and operationally, was to use the federal exchange. The transition to is anticipated to cost roughly $5 million. Oregon officials will be in Washington next week to negotiate with HHS the details of the arrangement.

Medicaid enrollments will continue to be handled by the state through the Oregon Health Authority. That means individuals seeking healthcare may need to deal with two bureaucracies to get enrolled in the appropriate plan.

“That will be a less integrated process than it was originally intended to be,” Alex Pettit, Cover Oregon’s acting chief information officer, said at the board meeting. “To what extent can we mitigate that with technology is unclear.”

There was little debate from board members prior to the vote about whether adopting the federal exchange was the best option. During a public comment period, Steve Buckstein, a senior policy analyst with the Cascade Policy Institute, brought up a pending federal lawsuit that challenges whether individuals buying coverage through the federal exchange are eligible for subsidies. “I don’t know the legal ramifications of what you’re doing, but I think you need to be aware of that,” Buckstein said.

Oregon has laid much of the blame for the website’s troubles on Oracle, its lead contractor. But numerous top Cover Oregon officials have also been pushed out as the problems mounted.

Fourteen states and the District of Columbia operated their own exchanges during the recently concluded 2014 open enrollment period. Federal officials are closely monitoring activities in two other states—Massachusetts and Maryland—that continue to have faulty websites and could consider moving to the federal exchange. New Mexico and Idaho are preparing to operate their own online marketplaces for the 2015 open enrollment period, which begins Nov. 15.

Follow Paul Demko on Twitter: @MHpdemko

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