Panel: Ditch Cover Oregon online exchange, switch to federal

Panel: Ditch Cover Oregon online exchange, switch to federal
This is a still image from one of the Cover Oregon television ads running on local TV stations. According to the ad agency that created the commercials, the two most well-known ads cost between $100,000 and $160,000 to make.

PORTLAND, Ore. (AP) — After months of deliberation over what to do with Oregon's botched online health exchange, an advisory panel on Thursday recommended that the state drop its trouble-plagued online health exchange for private policies and have Oregonians instead shop for them on the federal online marketplace.

A top Cover Oregon official, Alex Pettit, said fixing the existing system would be too costly at $78 million, would take too long to implement, and would be too risky. He said switching to the federal system would cost $4 million to $6 million.

Oregon would continue using its current technology for Medicaid enrollments, but not for people who are buying private policies.

The full Cover Oregon board on Friday will take up the recommendation, which comes nearly seven months after Oregon's online site was supposed to go live.

Oregon's exchange is seen as the worst of the more than a dozen states that developed their own online health insurance marketplaces. The state is the only one where the general public still can't use an online enrollment system to sign up for coverage in one sitting — despite an early start building the site and millions of dollars from the federal government.

The website was supposed to go live Oct. 1, but Cover Oregon and the technology vendor that built it, Oracle Corp., have been unable to work out all the glitches. Instead, Oregonians must use a costly, time-consuming, hybrid paper-online process to sign up for insurance.

The state has spent nearly $7 million on the paper processing efforts, in addition to $134 million in federal funding paid to Oracle.

Oregon was the only state to receive a monthlong enrollment extension because of the technology problems.

The federal Government Accountability Office has announced an investigation of Oregon's exchange, including looking at whether the federal government can reclaim grant money given to Cover Oregon if taxpayer funds were mismanaged.

Separately, former Health and Human Services Secretary Kathleen Sebelius asked for an inspector general's investigation into problems with the rollout of the health care law.

An independent investigation ordered by Gov. John Kitzhaber found state managers repeatedly failed to heed reports about technical problems that prevented the exchange from launching. It also found that Oracle did a shoddy job in building the exchange. Four Oregon officials connected to the development of the Cover Oregon portal have resigned.

Kitzhaber has insisted that communications about the portal's troubles never reached him as the planned Oct. 1 launch neared.

So far, about 240,000 Oregonians have enrolled in coverage through Cover Oregon. More than 69,000 of those enrolled in private health plans, while 171,000 enrolled in the Oregon Health Plan, the state's version of Medicaid.

An independent investigation ordered by Gov. John Kitzhaber found state managers repeatedly failed to heed reports about technical problems that prevented the exchange from launching. It also found that Cover Oregon's main technology contractor, Oracle Corp., did a shoddy job in building the exchange. Four Oregon officials connected to the portal's development have resigned.

Cover Oregon has paid $134 million in federal funding to Oracle and has spent another nearly $7 million on the paper processing efforts.

Copyright 2014 The Associated Press