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Oregon dumps its broken healthcare exchange for federal website

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DURHAM, Ore. — Oregon officials voted unanimously Friday to jettison the state’s disastrous health insurance exchange and instead switch to the federal website, admitting both disappointment and defeat in an arena where the state had been a trailblazer.

With its 7-0 vote, the board of directors for Cover Oregon acknowledged that the state exchange was too expensive and too troubled to fix. Although the state has spent an estimated $248 million to get its exchange up and running, it never enrolled a single private insurance customer online.

Alex Pettit, the state’s new chief information officer, insisted after the vote that the state’s vision did not fail, but that Oregon tried to do too much too quickly.

“It wasn’t anything wrong with the vision,” Pettit said. “The vision the state has is a very valuable, very lofty vision and should not be discounted. This was not a failure of policy. The failure was in the build …. My job is to improve the way the state of Oregon builds things.”

That vision was referred to here as “no wrong door.” The hope was that insurance customers could sign on to coveroregon.com and in one place shop for a private plan, find out if they were eligible for tax credits or Medicaid and enroll online in whatever insurance product was appropriate for them.

But the website where Oregonians were supposed to enroll in private plans, built by Cover Oregon's main contractor, Oracle, was troubled from the start.

After discovering a series of technical problems before the Oct. 1 launch -- including inaccurate calculations of the tax subsidies for which consumers would be eligible -- Cover Oregon decided to scratch its plans to go live along with the rest of the country and never managed to get online enrollment started.

The state turned instead to paper applications, bringing on some 400 workers -- some from other state agencies -- to help process each one. As of this week, about 70,192 individuals have selected private plans through Oregon's marketplace, according to a spokeswoman for Covered Oregon.

Oracle spokeswoman Deborah Hellinger said in a statement before the vote that the firm "looks forward to providing any assistance the state needs in moving parts of Oregon's healthcare exchange to the federal system if it ultimately decides to do so."

One option considered in the last month was to fix the technology using a new vendor. But an outside analysis revealed that such action would take too much time and cost an estimated $78 million, which the state cannot afford.

maria.laganga@latimes.com

Twitter: @marialaganga

Copyright © 2014, Los Angeles Times
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