Oregon officially dumps exchange for Healthcare.gov

Following rumors that the state would dump its ObamaCare exchange, Oregon made it official on Friday. After spending $300 million on a web portal that never enrolled a single person, Cover Oregon’s board of directors voted to become the first state to shut down its own exchange in favor of the federal Healthcare.gov site:

The Oregon board overseeing the state’s deeply flawed health insurance exchange unanimously approved the Obama administration’s plan Friday to take over the marketplace, making Oregon the first state to drop its enrollment Web site for HealthCare.gov.

Directors of the exchange, Cover Oregon, voted Friday to drop its enrollment Web site, which hadn’t fully recovered from a failed launch Oct. 1. Oregon, which was awarded $305 million in federal grants to build the exchange, remains the only state not allowing full online enrollment in Affordable Care Act health plans.

The vote came after Cover Oregon’s top technology official publicly recommended Thursday that the switch be made to HealthCare.gov, but state and federal officials had already agreed to shut down the Oregon-run insurance marketplace for the next enrollment period, scheduled to start Nov. 15. Despite the technology troubles, about 65,000 residents have obtained private insurance plans through Cover Oregon, which has used a hybrid enrollment process requiring paper applications.

“Using the federal technology represents the lowest-risk option,” said Alex Pettit, the exchange’s top technology official. It is estimated that the switch will cost $5 million.

The LA Times’s Maria La Ganga notes that the website will be an albatross in the midterm elections in Oregon, where the governor and one of the state’s US Senators will have to answer for the expensive flop:

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 the operation up and running, it never enrolled a single private insurance customer online. …

One of the only things certain Friday was that policy considerations had quickly given way to political ones. Gov. John Kitzhaber, a former emergency room physician who has dedicated his career to healthcare reform, is up for reelection in November. So is U.S. Sen. Jeff Merkley. Neither Democrat commented Friday, but their Republican opponents wasted little time before pouncing.

State Rep. Dennis Richardson, who is considered the GOP front-runner for governor, accused Kitzhaber of committing “gubernatorial malpractice” in the exchange’s troubles.

“We knew this was coming,” Richardson said in an interview Friday. “The system has been destined to fail from at least a year before the launch date.… We’re stuck paying the bill, the taxpayers are.”

Dr. Monica Wehby, a pediatric neurosurgeon and GOP contender for Merkley’s seat, issued a statement Friday describing herself as “the only U.S. Senate candidate who has opposed Obamacare and Cover Oregon from day one.”

“This latest move to the federal exchange,” Wehby said, “still doesn’t solve the root of the problem. Obamacare is bad for Oregon.”

It also ignores the fact that Healthcare.gov still hasn’t been completely built. In fact, as Erika pointed out on Saturday but is worth repeating here, Oregon just committed to relying on a system that “is still missing massive, critical pieces,” and will for the foreseeable future:

The Obamacare website may work for people buying insurance, but beneath the surface, HealthCare.gov is still missing massive, critical pieces — and the deadline for finishing them keeps slipping.

As a result, the system’s “back end” is a tangle of technical workarounds moving billions of taxpayer dollars and consumer-paid premiums between the government and insurers. The parts under construction are essential for key functions such as accurately paying insurers. The longer they lag, experts say, the likelier they’ll trigger accounting problems that could leave the public on the hook for higher premium subsidies or health care costs.

It’s an overlooked chapter in the health care law’s story that has largely escaped scrutiny because consumers aren’t directly affected. Yet it bolsters the Republican narrative that the government has mishandled the implementation of Obamacare. …

When that front end failed disastrously on Oct. 1, the administration diverted every resource to fix it, further delaying the behind-the-scenes technical functions. The deadline for completing those pieces gave way to January and then to mid-March. Senior officials said early last month that they hoped to have the entire system ready by the summer. Now, even summer appears to be a question mark.

Officials at the Centers for Medicare & Medicaid Services — the federal agency overseeing HealthCare.gov and new insurance exchanges — refused to provide an update on just how much of the back end remains incomplete, the current issues they face and their latest timetable.

This lovely update hit the news cycle late on Friday afternoon, just the same as Cover Oregon’s decision to throw in the towel on its $300 million investment. As far as ObamaCare’s failures being a “Republican narrative,” Guy Benson calls that reality:

That’s not so much a “Republican narrative” as it is a “patently obvious reality.” As crucial pieces of the website continue to be built — seven months after everything was supposed to be ready to do, and with updated “deadlines slipping” — all sorts of problems may rear their head. Phantom enrollments, potentially leading to tragic confusion. And as the story points out, the potential for higher costs to families and taxpayers. One health insurance CEO recently stated that a significant portion of 2015’s premium spikes are a direct result of the administration’s haphazard and unpredictable “fixes” to Obamacare. One wonders how a messy data reconciliation process might continue to impact costs in the coming years. Another point we’ve made repeatedly is that the White House’s chest thumping on enrollment figures is useless without an accurate sense of how many “enrollees” have actually completed the full process to obtain coverage. We know, for instance, that the administration missed badly on its target for “young invincible” sign-ups. We don’t have any official national stats on payment delinquency, or the percentage of “new” enrollees who previously had coverage.

Both Guy and Erika highlighted the part of the Politico story on this Friday afternoon news dump that the missing pieces of the back end mean that the “eight million enrollments” will likely be considerably lower. We already knew that, but the presumption was that the back end would get installed this summer. That would have given insurers much better data with which to calculate premiums in 2015. Now they will likely have to use worst-case estimates, which means premiums are going to rapidly increase again in the next enrollment period — and businesses will start adjusting to that this summer.

The website’s not the only part of ObamaCare that’s incomplete.

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