Obama Administration Reportedly to Take Over Oregon Exchange

Latest Obamacare fiasco news

Today it was reported that the Obama administration is preparing to take over the troubled Oregon health insurance exchange, Cover Oregon. According to The Washington Post's reporting federal officials have concluded "that several state-run marketplaces may be too dysfunctional to fix."

More from The Washington Post:

In public, the board overseeing Cover Oregon is scheduled to vote Friday whether to join the federal insurance marketplace that already sells health plans in most of the country under the Affordable Care Act. Behind the scenes, the officials say, federal and Oregon officials already have privately agreed that closing down the system is the best path to rescue the state marketplace, the country's only one to fail so spectacularly that no residents have been able to sign up for coverage online since it opened early last fall.

The collapse of Oregon's insurance marketplace comes as federal health officials are also focusing intensely on faltering exchanges in two other states, including Maryland.

The news comes a day after it was reported that the chief operating officer for Cover Oregon submitted her resignation. 

From The Oregonian:

Triz delaRosa, the chief operating officer for the Cover Oregon health insurance exchange, has submitted her resignation, one month after Gov. John Kitzhaber called for her removal.

DelaRosa, who'd worked for the exchange since June 2011, is just the latest political casualty of a fiasco that has already seen major turnover among managers who worked on the exchange, which continues to be the least functional in the country.

On March 20, at a press conference, Kitzhaber announced that he had accepted the resignation of Bruce Goldberg, the acting Cover Oregon director who, in his prior job as Oregon Health Authority director, had overseen the construction of the exchange. Kitzhaber also announced that he had asked the Cover Oregon board to remove Aaron Karjala, the exchange's top information-technology manager, and delaRosa.

Background on the Oregon exchange

Oregon's health insurance exchange failed to launch in October as planned and no Oregon residents have been able to sign up for health insurance through the exchange site. As Reason's Peter Suderman explained in January, the exchange received $48 million thanks to one of the federal government's "early innovator grants" as well as $11.8 million in IT support.

Suderman went on to explain that the attempts to build the Maryland and Oregon exchanges encountered similar problems:

Both states were recipients of "early innovator grants" from the federal government to develop what the administration hoped would be model exchanges: Oregon got $48 million, plus an additional $11.8 million IT supplement; Maryland got $6.2 million. Along with the grants came praise from the administration. In May 2013, a Washington Post report described the Oregon exchange as a White House favorite. And just days before the October launch of the exchanges nationwide, President Obama went to Maryland to tout the state's work developing its system.

And yet despite heavy funding and praise from Washington, there were clear early warnings that both exchanges were headed for trouble, with independent analysts telling officials in both states that the projects were not on track.

In Maryland, those warnings came from consulting firm BerryDunn, which warned of significant risks to the project as early as 2012. Oregon's warnings came even earlier, in November of 2011, when analysts from the consulting firm Maximus "noted high risks due to insufficient management controls," according to The Oregonian's report.

Both exchanges suffered under muddled leadership and lack of planning: Oregon's system was to be built by one bureaucracy, but managed by another, which led to managerial confusion and bureaucratic turf wars. In Maryland, BerryDunn reported early on that there was simply no one in charge of the project, and that no one had even taken the step of drawing up a basic timeline of milestones and achievements.

Watch a promotion video for Cover Oregon below:

Read more from Reason on Obamacare here.