Kitzhaber and Richardson Downplay Remarks from Obama Nominee

Comments from U.S. Health & Human Services nominee Sylvia Mathews Burwell meant more negative national press for Cover Oregon, but both leading candidates for the Oregon governor’s office think there’s little new indication that the federal government will make the state repay the $248 million grants it wasted on Cover Oregon before abandoning ship and turning over operations to the federal website,

President Obama’s nominee to replace Kathleen Sebelius at the head of the U.S. Department of Health & Human Services put Oregon back in the spotlight last week, telling a Senate committee that the federal government may try to recoup costs from failed insurance exchanges like Cover Oregon.

“Where the federal government and the taxpayer has had funds misused, we need to use the full extent of the law to get those funds back for the taxpayer,” Sylvia Mathews Burwell told the Senate Finance Committee, according to the Washington, D.C., news site Politico.

But her comments will likely have little bearing on whether the federal government will make Oregon repay its grants, which, at $248 million, are worth more than the combined amount of grants to three other nonfunctional online state insurance portals  -- Maryland, Nevada and Massachusetts.

Statements from both Gov. John Kitzhaber’s office and his chief Republican rival, Rep. Dennis Richardson of Central Point, downplayed any impact or change in direction out of the federal government.

The unforeseen and unintended but incompetent rollout of the failed Cover Oregon insurance exchange has made it a tough road for Oregon and Gov. Kitzhaber since he was invited to sit with First Lady Michelle Obama just a year ago at the 2013 State of the Union address, an honor conveyed upon Oregon’s medical doctor governor for his work transforming the state Medicaid system.

But Kitzhaber’s spokeswoman, Nkenge Harmon Johnson, insists that the state still has a good working relationship with the U.S. Department of Health & Human Services.

“We expect that [relationship] will continue as we move forward to improve our system for enrolling more Oregonians in the high quality, affordable health coverage that they deserve,” Harmon Johnson wrote in an email to The Lund Report. “Her comments were about contractors, not states,” she added.

Perhaps more telling than the statement from the governor’s office were those from his gubernatorial opponent, Rep. Richardson, who is the leading candidate for the Republican nomination in Tuesday’s primary election.

“She said what anybody would say in her position. … She’s just taking the politically neutral position for which I don’t think we can draw any conclusions,” Richardson told The Lund Report. “It’s too early to tell whether there is going to be any consequence for Oregon.”

Richardson said he was still more alarmed at the positions taken by acting Cover Oregon Director Clyde Hamstreet before a legislative committee earlier this month.

Hamstreet said Cover Oregon planned to spend all of the remaining $54 million in federal grant money, even as it turns over most operations to in November for open enrollment. In Richardson’s view, this doesn’t allow for any contingency funds if Cover Oregon runs into more trouble in its dealings with Oracle.

He said that because of the state’s poorly written contract,  it was still uncertain whether Oregon would be able to withhold the $30 million to Oracle that it has denied the company because of the California tech giant’s incompetent work.

“If Oracle has a time-and-materials contract, and Oracle can prove it delivered the time and materials … Oracle has a good chance of getting that money,” Richardson said. “That’s why you have a reserve.”

Another leading Oregon politician, Sen. Ron Wyden, who chairs the Senate Finance Committee, which is charged with vetting the Burwell nomination, said he would await the findings of a U.S. Government Accountability Office investigation before he would make any determination as to allegations of wrongdoing or negligence surrounding Cover Oregon, according to Politico.

Chris can be reached at [email protected].

Image by By John D. (Jay) Rockefeller IV [CC-BY-2.0 (], via Wikimedia Commons

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