Oregon Officials Abandon State Insurance Exchange, Turn To Federal Exchange

DURHAM, Ore. — (Mealey’s) Oregon on April 25 dumped its failed Patient Protection and Affordable Care Act (ACA) state exchange at an agency board meeting, with the governing body unanimously adopting a technology workgroup suggestion that the federal exchange provided the most reliable and least costly option going forward. 

Cover Oregon, the state program governing the exchange, spent $181,580,585 on it over the course of three years, according to documents presented at the Cover Oregon Board of Directors meeting.

 Costs 

During the meeting, officials said they considered 10 other options, which they quickly narrowed to three.  Those options were using the federal exchange, importing another state’s exchange technology and fixing the current exchange. 

Officials noted that Maryland is importing Connecticut’s exchange, with which it shares technology, at a cost of $45 million.  In addition to cost, officials noted that such an option presented other challenges, including technology issues and the fact that it had never been done. 

Fixing the current exchange would require an estimated 390,000 man hours at a cost of $78 million, officials said.  Officials said this exceeds the available resources. 

Neither option allowed the state to meet its goal of having a fully functional exchange by November, the officials said. 

Going Forward 

The move will leave Oregon responsible for front-end outreach, education, management and some oversight, according to officials.  At a minimum, the move will requiring bifurcating the process for obtaining Medicaid from the process for obtaining private insurance through an exchange, officials said. 

The move will leave the state’s exchange website, coveroregon.com, as a mere gateway to the healthcare.gov website. 

During public comments, an individual warned that pending litigation could result in courts stripping penalties and premium support for individuals enrolled through the federal exchange.  That case, Jacqueline Halbig, et al. v. Kathleen Sebelius, et al., No. 14-5018), is  pending before the District of Columbia Circuit U.S. Court of Appeals. 

The came after a day after Oregon technology chief Alex Pettit recommended the move.  Pettit made his recommendation during a Cover Oregon Technology Options Workgroup meeting. 

Grants 

According to coveroregon.com, the state received a $1 million federal grant covering the first year of the exchange and a $48 million grant to create a prototype exchange designed to be a model for other states; in January 2013, it received $226 million to “operationalize” the exchange. 

The exchange was considered a White House favorite and potential model for other states at one point.  However, Cover Oregon delayed opening the exchange after reportedly experiencing difficulties bringing it online.  According to reports, the exchange never became fully operational.  As a result, Oregon delayed the close of open enrollment until April 30, according to reports.  Open enrollment in the federal exchanges closed March 31 with an exception for complex cases. 

Despite the exchange’s problems, Cover Oregon reportedly enrolled 224,586 individuals through April 15.  Of that, 65,963 enrolled in private medical insurance and 158,623 enrolled in the Oregon Health Plan, which covers low-income individuals.  After calculating for cancellations and terminations, the state enrolled 62,287 individuals in private medical insurance.  

In March, Cover Oregon Acting Director Bruce Goldberg resigned.

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