After months of trying to get its problem-plagued online health exchange to work, Oregon on Friday officially gave up on the state portal and decided to switch to the federal website — the first state in the nation to do so.
An early adapter and enthusiast of the Affordable Care Act, Oregon was once seen as the national leader in health care reform. The progressive state’s ambitious vision for its exchange — a colossal multimillion-dollar failure — and the inability to fix the glitch-filled site illustrate the complexity of the health care law and the challenges for states that decided to build their own exchanges.
Oregon, which so far has failed to enroll a single person in one sitting through its exchange, decided to ditch it because officials said fixing it would be too costly at $78 million and would take too long. Switching to the federal system will cost just $4 million to $6 million and is the least risky option.
Oregon’s exchange is seen as the worst in more than a dozen states that developed their own online health insurance marketplaces. Oregonians must use a time-consuming hybrid paper-online process to sign up for insurance. The state also had to hire more than 400 workers to aid in the manual enrollment process — despite $134 million Oregon paid its main technology contractor, Oracle Corp., to build the online exchange. The state received a monthlong enrollment deadline extension because of the technology problems.
Several other states that have experienced major problems with their exchanges are also debating their futures. It’s unclear how many, if any, will switch to the federal portal. Already, one other state has chosen to replace its site: Maryland recently decided to adopt the technology used on Connecticut’s successful exchange.
Of the 14 states and the District of Columbia that built their own exchanges, some portals are running smoothly, including in California, Washington state, Connecticut and Kentucky. But in a half dozen states, technical troubles have cropped up after exchanges launched in October, marring implementation of the health care overhaul.
Oregon will continue using the current technology for Medicaid enrollments, but it will have to improve on the system. Officials estimated the cost of the improvements at about $35 million. They said the federal government would pay 90 percent of those costs and of the costs to switch to the federal exchange. In total, Oregon has spent nearly $250 million of the $305 million it received from the federal government under the Affordable Care Act.
Republicans blasted Cover Oregon after its board decided to ditch the beleaguered site.
“Today’s decision by Cover Oregon to move to the federal health exchange after months of false assurances is an incredibly embarrassing moment for the state of Oregon,” said state Rep. Mike McLane, R-Powell Butte. “Oregonians were sold false promises, and all we got was a faulty, unfinished product …”
But Cover Oregon officials defended the exchange and its technology work.
“There’s a lot of disappointment. There was a lot of passion for the project,” Cover Oregon interim executive director Clyde Hamstreet said. “But I don’t think it’s all a waste. There’s a lot of value in what’s been done.”
Despite the exchange’s technology fiasco, about 242,000 Oregonians have enrolled in coverage. An estimated 70,000 of those enrolled in private health plans, while 172,000 enrolled in the Oregon Health Plan.
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