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Oregon's broken healthcare exchange may move to federal network

Arminda Murillo, 54, reads a leaflet at a health insurance enrollment event in Cudahy, California March 27, 2014.
CREDIT: REUTERS/LUCY NICHOLSON
Arminda Murillo, 54, reads a leaflet at a health insurance enrollment event in Cudahy, California March 27, 2014. CREDIT: REUTERS/LUCY NICHOLSON

By Shelby Sebens

PORTLAND (Reuters) - Top officials for Oregon's troubled health insurance network, dogged by technical glitches that have kept a single subscriber from enrolling online, recommended on Thursday dumping the state website in favor of a federally run healthcare exchange.

Oregon, a state that fully embraced the Affordable Care Act, has endured one of the rockiest rollouts of President Barack Obama's signature healthcare law, requiring tens of thousands of applicants to apply on paper since launching on October 1.

Managers of the state exchange, called Cover Oregon, have determined it would cost about $78 million to fix and continue under the beleaguered system, well above the projected cost of switching over to the federal exchange, spokesman Alex Pettit said.

Under the latest proposal, the private insurance plans now offered through Cover Oregon would be moved to the federal website, while individuals seeking coverage under an expansion of Medicaid, a state-federal healthcare plan for the needy, would apply through the Oregon Health Authority, spokeswoman Ariane Holm said.

The recommendation came during a meeting of the Cover Oregon working group put together last month in a bid to sort through the issues plaguing the state exchange.

Several Cover Oregon officials, including two past directors of the program, have resigned in recent months amid an independent investigation that found mismanagement of the system and a failure to report problems from the beginning.

Oregon is not alone. Officials in Maryland and Massachusetts also considered shifting their state-run exchanges to the federal network after experiencing technical problems.

Maryland ultimately kept its exchange intact using special technology developed by Connecticut to manage the system, at a cost of about $45 million, Pettit said.

In addition to Oregon, the federal government already is running exchanges for 36 states that initially declined to establish their own networks, though at least two of those - New Mexico and Idaho - have said they plan to launch their own next year.

The Cover Oregon Board of Directors is expected to decide on Friday whether to approve the recommended transfer.

Cover Oregon has already paid $134 million to Oracle Corp. for development of the non-functioning website, and the state has received roughly $300 million in federal grants for the program.

Members of Oregon's congressional delegation have called for a further investigation of the failed state exchange.

(Reporting by Shelby Sebens; Editing by Steve Gorman and Jan Paschal)

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