Oregon Dumps Failed Health Insurance Exchange

Oregon's health insurance exchange will shut down, sending state residents instead to the federal HealthCare.gov website -- which, for all its troubles, looks good in comparison with a state site that never enrolled a single consumer.

The board of Cover Oregon, the quasi-public agency that ran the state health insurance exchange, on Friday voted unanimously to accept a recommendation to move to merge its website into HealthCare.gov.

As reported by the Oregonian newspaper, the state had been moving toward having Deloitte overhaul the website and related back-end systems, but pulled back after the estimated cost ballooned to more than $78 million. A panel evaluating the costs concluded that a switch to the federal exchange could be accomplished for $4 million to $6 million. The one component of the state-run system to be maintained would be for enrollment in Medicaid for those eligible.

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More than $303 million in state and federal funds have been sunk into the project so far. Oracle collected $134 million to build the online exchange. The process of assessing blame for the failure of Cover Oregon often has focused on the role of Oracle, which was the primary technology provider and implementation consultant on the project. However, Oracle never had the authority to act as system integrator, a role state IT leaders decided to take on themselves. State and federal investigations pointed to inadequate oversight and project management as problems. State of Oregon CIO Alex Pettit, who was assigned to help rescue Cover Oregon, said that in addition to costing too much, a project to repair the site in time for the next open enrollment period beginning in November was too risky.

The Cover Oregon website eventually performed well enough to provide some services to insurance agents but was never judged adequate for use by the public. Instead, all Obamacare enrollments had to be processed on paper or through other workarounds.

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