Obamacare

Feds to Take Over Oregon's Failed $300 Million Health Insurance Exchange

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The state of Oregon received $303 million in federal grants—more than all but two other states—to build and operate a health insurance exchange, dubbed Cover Oregon, under Obamacare. One of those grants was a $48 million "early innovator" grant for states whose exchanges were intended to serve as models for the nation. The state was among the most enthusiastic about implementing the law, with Democratic Gov. John Kitzhaber touting both the law and his state's work building the exchange. 

The state's work on its exchange recieved praise throughout the media, and it was reportedly loved by the Obama administration: In May of last year, The Washington Post described it as "the White House's favorite health exchange." The week before the exchanges were set to launch around the country, Government Technology magazine profiled Aaron Karjala, Cover Oregon's Chief Information Officer (CIO). The opening line: "As states launch their federally mandated health insurance exchanges, officials in Oregon say they are poised to set a high bar for just how smoothly such a system can operate." On October 1, the day the exchanges launched around the country, Information Week published an adulatory commentary piece on Cover Oregon: "Obamacare Health Exchanges: How Oregon Got It Done." 

Oregon didn't get it done. The bar was not set high. It was hardly set at all. The state delayed the opening of its exchange. At the end of October, state officials were still struggling to bring the system online. Gov. Kitzhaber, however, continued with the happy talk. "I think we're in really good shape here in Oregon. Do we have some problems? Yes. Are we concerned? Of course. But I believe we'll come through this very well," he told KATU news

Cover Oregon didn't come through it at all. There were delays, and then more delays. The exchange never successfully went online. No one ever signed up for private coverage through the system. Reports surfaced showing that independent consultants had warned for years that the ambitious project was likely doomed. The warnings were ignored.

In March, Gov. Kitzhaber accepted the resignation of Cover Oregon's acting director Bruce Goldberg, who supervised the exchange-building process, and requested that the exchange's board remove Chief Operating Office Triz DelaRosa and CIO Aaron Karjala. It was a $300 million disaster—a model for the nation that turned out to be a total failure. 

State officials may finally be coming to grips with the idea that they have failed completely. It looks like the exchange will be closed down and turned over to the feds. Perhaps fittingly, the White House's favorite exchange will be turned over to the White House.  Via The Washington Post:

The Obama administration is poised to take over Oregon's broken insurance exchange, according to officials familiar with the decision, who say that it reflects federal officials' conclusion that several state-run marketplaces may be too dysfunctional to fix.

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.

According to a Tweet from KATU reporter Chelsea Kopta, the state won't be returning any of the federal grant money. 

Here's an ad for the exchange: 

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  1. Yeah, let a proven leader take the reins.

  2. Queue up the money pit video.

    1. With a twee guitar player?

  3. re: the Alt text

    Last I checked, The State Government doesn’t make the beer in Oregon.

    That said – it does really beggar the imagination; what possible combination of people could take $300 million dollars and assigned a task – produce *less than nothing*? The net result of this money and time being only a giant hole that other people’s time and money will now be needed to fill it in?

    Perhaps Johnathan Chait could explain to me how even asking this question is racist.

    1. The fact that you need someone to racist-splain why you’re racist just shows how racist you are, RACIST!

      Also, fried chicken.

      1. Ha, ha! You’re so racist.

        /bites watermelon.

    2. One of those grants was a $48 million “early innovator” grant for states whose exchanges were intended to serve as models for the nation.

      Which, given federal “success,” it pretty much did.

  4. Stimulus! Why look at how that $300 mil went to pay consultants, managers, bureaucrats, and IT employees. They in turn, bought stuff – stuff that stimulated the local economy. Whats not to love!

    /krugman

    1. It’s the disaster he’s been hoping for.

      1. I thought Space Aliens were the disaster he was hoping for!

        1. Maybe aliens were why the exchange failed!!!!!

          *tightens aluminum foil hat*

          1. Maybe…

    2. Stimulus! Why look at how that $300 mil went to pay consultants, managers, bureaucrats, and IT employees.

      All good, well-connected progs and dems no doubt.

  5. This only goes to show the failure of federalism. If only everybody had let the feds build the exchanges. Seven million signups!

  6. Interesting how that whole post makes no mention of Oracle, which ended up with $134 million of that $300 million.

    1. Why is that interesting?

      1. nteresting how that whole post makes no mention of Oracle, which ended up with $134 million of that $300 million.

        Sure, complain now, but you were all happy when Oracle won the America’s Cup. Do you have any idea how much yacht racing costs? The use of $134 million in public healthcare funds was much better spent for this than for some kid’s antibiotics.

    2. I suppose you’re right. Oregon’s off the hook.

      1. Yes, because obviously we can only go after one or the other. There’s no way a several hundred word post could possibly blame multiple parties.

        1. Of course; the people writing the checks, setting the goals, the timetables, and the benchmarks should share equal blame with the company they’re paying to set up the thing.

          If there’s news of fraud, by all means, nail Oracle to the wall. But let’s not pretend it’s Oracle’s job to be good stewards of Oregon’s money.

    3. Yeah, the top software company in the world blew it somehow (yes, ORCL MSFT or SAP).

      1. The best part of having contractors is always being able to blame the contractors.

        1. ^^ This. Fundamental to the economy of public contracting.

    4. Typical big project fuck-ups:

      Oregon’s decision not to hire a systems integrator has since been criticized by the state itself and in the independent review released by Atlanta-based First Data Government Solutions in March.

      According to that investigation, the contract language and the terms of the Oracle purchase orders also delineate a smaller role for Oracle. The contract was based on hours worked, not on the completion of work. It “put the burden on the state for directing the vendor work and offers little accountability for Oracle’s performance,” First Data wrote.

      http://sacramento.cbslocal.com…..ed-launch/

      So they billed the shit out of them with no milestone/goals. Private companies have been just as stupid – with private money.

      1. So they billed the shit out of them with no milestone/goals. Private companies have been just as stupid – with private money.

        Clearly, the government of Oregon had nothing to do with that setup.

        Again, being a socialist means never having to say your sorry. There’s always some free market something somewhere you can blame, right on up to complete totalitarianism. And, at that point, there’s no reason to say you’re sorry, anyway.

        1. Likewise being a corpratist means never having to say your sorry. There’s always some government regulator something somwhere you can blame. Oregon MADE Oracle waste millions of dollars!

          1. Well, That kind of thing doesn’t lend much support to a law which, say, mandates everyone contract with a corporate insurer.

            1. Ah, so we should just pretend big corporations aren’t colluding with officials to bilk taxpayers because that interferes with our simply BUSINESS GOOD, GOVERNMENT BAD narrative. Team politics is more important than actually getting anything done.

              1. that interferes with our simply BUSINESS GOOD, GOVERNMENT BAD narrative

                The reason that a Libertarian feels this way is because, loosely defined, business is the free exchange of goods and services without force or fraud. Government, on the other hand, is always about coercion. No one here defends government contractors as paragons of virtue because they are private companies. Business isn’t virtuous because it is private or productive but because it is free. When it isn’t, there is almost always government coercion involved and it is almost universally opposed here, as far as I have ever seen.

                The narrative, if you will, is LIBERTY GOOD, COERCION BAD.

                1. loosely defined, business is the free exchange of goods and services without force or fraud

                  No, a market is the free exchange of goods and services without force or fraud. For some reason the commenters here have an ongoing problem distinguishing between being pro-market and being pro-business.

                  No one here defends government contractors as paragons of virtue because they are private companies.

                  No, they just remain suspiciously silent about them and writing comments implying that anyone who is criticizing them must be a socialist.

                  1. See yesterday’s article on the IM EX bank and get back to us after you’ve taken your morning meds.

              2. NEEDS MOAR ALLCAPS!!!111!!!11!1!111!!

              3. That’s funny. I seem to recall countless stories and comments on this website criticizing crony capitalism, attacking corporations that use government regulation and tax laws to squeeze out competitors and restrict competition, and lambasting corporations that feed at the public trough.

                Perhaps you have mistaken us for another website. One that exists purely in your imagination, for instance?

          2. Did Oracle meet their contractual requirements? I genuinely don’t know.

            1. vazhzsh|4.24.14 @ 6:47PM|#
              “Did Oracle meet their contractual requirements? I genuinely don’t know.”

              I don’t either, and seemingly, neither do those spending taxpayer money for the services.

          3. Oregon MADE Oracle waste millions of dollars!

            Actually, that sort of thing happens all the time. Contractors are given vague, conflicting, or even impossible orders, which then change all the time, and when the project goes over budget, they get blamed.

            Not saying that Oracle did no wrong, but I’ll bet Oregon politicians and bureaucrats are mainly to blame.

      2. To wind up with a contract based solely on hours worked with no stated goal almost certainly indicates the lack of a coherent plan on the part of the contracting agency. You only get to that point after you’ve already tried to con the private firm into committing to your vague goals for a lump sum and having them balls-out refuse.

      3. Private companies have been just as stupid – with private money.

        Hmm, I feel like one of the explicit, stated goals of the ACA was to prevent that kind of waste…

        1. Hmm, I feel like one of the explicit, stated goals of the ACA was to prevent that kind of waste…

          Hahahahahah! One of the explicit, unstated goals of the ACA was to enable that kind of waste…

  7. You Know Who Else tried to take over an Exchange?

    1. Kathleen Sebelius’ successor?

    2. An IT company in India?

    3. The Jedi Exile?

    4. The guy who published the hoax about Giorgio Armani dying?

      1. WHAT?!?!?! Giorgio Armani is dead?? Does anybody know?

        1. loureed.com is all over it

    5. Certain Underwriters at Lloyd’s?

    6. Bane?

  8. But…but…they hired only the best stoned hippie graphic artists to make that ad! How could everything have gone wrong?

  9. OT: My best friend – since we were, like, 12 – just posted an article from Jezebel. Non ironically. And not making fun of it, but using it to support his contention that [non-Prog] people are stupid (i.e. that’s what the article is on about).

    I am SO conflicted…there’s getting to be less and less we can talk about without me having to just leave the room for the Progtard virus…

    Quoting. Jezebel. Non ironically. Fuck. He’s my BEST FRIEND!!

    1. I think you just need to come out to him and be very frank about your libertarian tendancies. (Make clear that you don’t expect him to be libertarian with you.)

      1. That, or hiring cult deprogrammers and having them kidnap him. Probably violates the NAP, though.

      2. Somewhere on DU there will be an identical post about how someone’s best friend (since twelve years old!) admitted to being libertarian. And not, like, ironically! A fully-fledged teathugger Grover Norquist drown-it-in-the-bathtub gubmint-trashing libertarian!

        1. Funny, I thought the EXACT SAME THING.

          *looks longingly at Dweebston…my….NEW…be…no, it could never be….*

    2. You’re a grown man. You don’t need besties. You need associates and family. Cut off the sentimental fluff! Cauterize it with liquor!

      1. Naw, we went through allllll the good shit together – getting high for the first time, getting laid for the first time within a week of each other (with different women, no homo), deaths, acid, drag racing, shootin’ guns, getting busted, went to school together right through college ….then he went all soft in his forties.

        He knows more about me than my wife. Come to think of it, I probably should kill him….

        1. He’s receiving the same orders about you from the powers that beq

          1. Yeah, but he’s a lefty pussy with no guns, and I’ve always been way meaner and stronger so….PWND.

        2. I’m not above telling my friends they’re being assholes if they are in fact, being assholes.

        3. I lost touch with all but a few of my friends following high school. Unfortunately most of them didn’t survive the transition from teenage half-drunk chronically unemployed fuckup to college-attending career-minded adultishness. I’ll knock back a good amount of liquor and wax loquacious about whatever, but the sort of people who never quite made it out of the old high school town just depress me to no end.

          1. YEah, there are literally about 3 people I’ve stayed in touch with. All doing OK to very well.

            The rest of my farmtown, welfare cohort…well, when we go to WalMart, I tell my kids, “These are my people…”

            And I’m not kidding…

        4. Just make sure he doesn’t know more about your wife than you – then you have a real problem.

    3. And not making fun of it, but using it to support his contention that [non-Prog] people are stupid (i.e. that’s what the article is on about).

      It’s always the same article, over and over again.

      Libertarian argument against socialist democrats: “I don’t think solving social problems with violence is a good, healthy, productive way to go about that, especially when you have alternatives.”

      Socialist democrat argument against Libertarians: “Libertarians are strange, adolescent creatures, caught somewhere between high school and college, who have an grossly obsessive relationship with the insane writings of a bizarre Russian woman from the 1950’s. Truly sociopathic in nature, they cling to racism, sexism, homophobia, and gun violence in order to fill the massive void in their self-esteem that comes from having to constantly see their fanatical devotion to freedom and free markets contradicted by facts and history. They are disconnected from reality, yet insist that their world view is a valid one, despite all of the evidence of all of the experts in all of the fields all of the time, everywhere. Their mothers are all hamsters and their fathers smell of elderberries.”

      What does is say about a group of people who love to read and say that over and over again?

    4. Beat the shit out of him, fuck his sister, and find a new friend.

      It’s the libertarian way.

      1. Beat the shit out of him, fuck his sister, and find a new friend.

        It’s the libertarian way.

        I don’t think you appreciate the iterative nature of your plan!

        Beat the shit out of him, fuck his sister, and find a new friend.

        Rinse and repeat.

      2. You forgot – kidnap the sister’s children for child labor and PROFITZ!

    5. INTERVENTION!

  10. …”In May of last year, The Washington Post described it as “the White House’s favorite health exchange.”…

    Mine, too!

  11. “Free to be healthee”

    If I say to my neighbor, “Bitch, come over, mow my lawn” and he comes over and mows my lawn, am I free to have decent landscaping?

    1. You should use a locally sourced push mower so you give an American a job and get much needed exercise. Also, you shouldn’t have a lawn, unless local laws require it, and even if they do, try planting kale instead. Either way, you’d better compost the waste.

    2. Officer am I free to, um, cavort about your landscaping?

      1. Don’t say it!

  12. Once upon a time, doctors used to come to the people and were paid in cash or chickens and eggs. And all was fairly well. Then people started buying health insurance and inserted a middle man into the equation — one that the doctors could gouge and that could in-turn, gouge the insureds. Then along came Medicare and Medicaid in the 60s. And healthcare costs skyrocketed while outcomes got even worse.

    So in light of our own medical history as a nation, we know that inserting the federal government as another middle man that gets between the insured and the insurance company, and then between the insured and the doctor, must result in even more efficient transactions than what we already have.

  13. HAHAHAHAHA…wait…that’s my fuckin’ money too!

    Dipshits. So when do we get the where are they now article that shows Karjala, Goldberg and DelaRosa have high paying gigs as HC consultants. They will either be raking in the big bucks from gov contracts or be working for one of Obama’s fascist supporter orgs (Enroll America, OFA, etc)

  14. Oh, and that video is the gayest crap I’ve ever seen. Hard to believe Oregon occasionally has a good football team.

    1. The football team isn’t from Oregon. Unless all 35 black dudes that live in Oregon play for the team.

  15. Annnd…comments on the Info Week article start 10/1/2013 and end on 10/4/2013. The author was commenting, but stopped after less than a day as the glitches rolled in.

    Good job journalists. No follow up links either that I would typically see on a web page.

  16. Heck of a job, Brucie.

  17. “Cover Oregon didn’t come through it at all. There were delays, and then more delays. The exchange never successfully went online. No one ever signed up for private coverage through the system. Reports surfaced showing that independent consultants had warned for years that the ambitious project was likely doomed. The warnings were ignored.”
    +
    “loved by the Obama administration”

    Well sure, if Obama had a state health insurance program, it would look like Cover Oregon

    1. RACISS’!

  18. This doesn’t surprise me at all. Oregon’s government has become laughably corrupt–the failed attempt at a new I-5 bridge over the Columbia River is a good example. One of the governor’s cronies headed up the “task force” that spent a zillion dollars without producing a viable bridge project. Washington’s legislature saw what a boondoggle it was and pulled the plug on their half of the funding, but amazingly the corruptocrats in Oregon keep going on it!

    1. So does the bridge end half-way over/

  19. What the fuck were they doing? How could even a group of even the most incompetent scumfuck bureaucrats spend 300 million dollars and accomplish absolutely nothing?

    Wait. Easily. That’s how they did it. Easily.

    Did you guys hear the one about the Army’s 300 mil blimp that they developed, built, and then abandoned?

    1. No, the Army does not waste money, they spend it to defend the nation by deploying in Poland.

      1. Don’t you dare question the validity of several military bases here in Oklahoma. They will be needed on the front lines if we get invaded by…..

        How about we build a very large badger?

        1. Marshall Gill|4.24.14 @ 6:50PM|#
          “Don’t you dare question the validity of several military bases here in Oklahoma”

          Please tell me they’re not Coast Guard bases.

          1. Fort Sill and Tinker AFB I know of.

  20. What, that hippie-commie video didn’t magically-poof make it work?

  21. 300 million down the fucking crapper. And they’ll all shrug their shoulders like it’s no big deal, and then regard us with genuine astonishment when we’re skeptical of the next fucking mega-boondoggle, and maybe explain that republicans waste money too so that makes it OK. There aren’t enough rusty chainsaws in the world with which to fuck all these people.

    1. That’s the beauty of being a prog, when their plans don’t work out it’s always because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

      And when that doesn’t work it’s because government didn’t have enough power or spend enough money.

  22. Come on everyone. The debate is over. Obamacare is a complete success. The doubters have been proven wrong. Cover Oregon was simply unable to get its message out because of FOXNews and rush Limbaugh.

    /ObamaNeverLies

  23. Sure, everything is going swell. That’s why Sebelius left. Everything has gone exactly as planned.

    Someone should inform Sebelius the real reason her implementation was such an utter failure. First of all you lied about it?or should I say Barry did.
    But here is the premise of why ACA is a failure. The young aren’t buying into that they should pay so another man should pay less or not at all. The young finally understood what Marxism is, even though all these years your Marxist policies were guised under being Progressive. You know, like letting illegal aliens have benefits. Little different attitude when the young have their own wallets dipped into isn’t it Barry?

    This will not sustain itself. Because you continue to expand to those who do not contribute. Each according to need.So when we collapse as my fiction and history states we will with this continued drive to Marxism it will give me great solace to at least know that the Progressive will suffer as well. As many already are who are now paying higher premiums today.

    Charles Hurst. Author of THE SECOND FALL. An offbeat story of Armageddon. And creator of THE RUNNINGWOLF EZINE

  24. Following the twitter link I learned that they’ve only spent 250 of the 300 mil so far. Oregon has 4 million people. They could’ve given everyone 6 million bucks and they could’ve purchased health care for the rest of their lives.

    Or they could’ve withheld large chunks to give to future Oregonians. Hopefully, after I moved there for the multi-million dollar handout.

    1. Good lord Terc. You’re an idiot at math. 60 bucks. Sheesh. I work in theater OK?!

      1. You have a future with HHS!!!!!

        /govjobs.com

  25. “In May of last year, The Washington Post described it as “the White House’s favorite health exchange.” ”

    An Obama endorsement for any venture is the kiss of death. If a socialist thinks it is a swell idea, you can bet it is dog shit. Who did not see this coming?

  26. Oh God, that song…aaaaagh!!

    The hippie teacher on Beavis and Butthead played better songs than that.

    Rebecca Black could have ‘written’ a better song.

    And that animation! Is that a parody of the kind of animation a “Gender-Free Self Expression and Creative Activity Supplemental K-6 Resource Coordinator” (funded by the DOE to the tune of $200K each, of which the ‘teacher’ gets $40K and don’t ask.) would have her students produce??

    Un-be-fucking-lievable.

  27. If we force all the birds to work together we can build ONE GIANT BIRD for some damn reason! The collectivist bird! The dream fulfilled! Fetch the epoxy! It cannot fail! Oh ? oh, dear ?
    As God is my witness, I thought it would fly.

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