Probing into the Finances of Cover Oregon

How can the health insurance exchange remain viable with lower than anticipated enrollment?

How can Cover Oregon possibly survive into the next year with so few people enrolled in the 11 qualified health plans?

Money from the federal government is expected to dry up, and the exchange was built on the premise that the health insurers would pay a monthly fee – for every member – approximately $9 – with those dollars making up its operational fund in 2015. But, with only 34,000 people enrolled in such plans – compared to the projection of 217,000 – which included the SHOP program for small employers that’s been put on hold – what’s the likelihood of Cover Oregon having enough money to survive another year?

That’s the question The Lund Report posed to Jose Gonzalez, who chairs the Finance and Audit Committee of Cover Oregon and is the principal broker with Tu Casa Real Estate Corporation in Salem.

Gonzalez was anything but pessimistic. “The revenue estimates were based on low enrollment figures,” he said, and the initial dollars raised by the insurance fees are expected to cover the reserves, not the operational funds.

“We’ll be safe when it comes to operating funds,” he said confidently, adding that he expects budgetary cuts in marketing, outreach and staffing. “Nothing out of the ordinary.”

A much clearer picture of Cover Oregon’s finances will be revealed when the finance committee meets Feb. 12 and reviews the most recent financial data, according to spokesman Michael Cox. Its recommendations come before the full board which meets the following afternoon.

The other finance committee members include Teri Andrews, owner of CG Industries; Sujata Sanehvi, chief operating officer with PacificSource Health Plan; Jeff Fritsche, finance director with the Oregon Health Authority and Anthony Kesler, career services with Goodwill Industries of the Columbia Willamette.

Bruce Goldberg talks to the health plans

Earlier this week, Bruce Goldberg, interim executive director of Cover Oregon, gave an update to health insurance executives during a conference call, giving them the latest enrollment numbers.

With people still need to complete a 20-page application to enroll in Cover Oregon, there remains about 20,000 applicants who’ve not been processed – even though some people submitted their paperwork in December. Another 30,000 people have been approved but not yet chosen a health plan. Meanwhile, Cover Oregon continues receiving between 500-1,000 applications a day, and currently there are 34,000 people enrolled in a private health plan.

Goldberg also led health plan executives to believe that the dysfunctional website is entering the final phase for testing on its functionality – performance and security – over the coming weeks – but was unwilling to specify a firm date as to when the website would actually be up and running, according to an executive who participated in the conference call.

Goldberg is also planning to set up an advisory council of health plans CEOs to advise Cover Oregon.

Richardson gathering petition signatures

In his plea to determine what really caused the failure of Cover Oregon, State Rep. Dennis Richardson is demanding a federal audit of the entire project, and began asking his constituents to sign such a petition. A Central Point Republican, he’s also a candidate for governor.

By Wednesday, morning, he had gathered 4,353 signatures. “We had 3,000 in the first hour,” Richardson told The Lund Report. “We’ve talked to Greg Walden (Republican Representative), and he’s impressed by the outpouring of concern, and he’ll get right on it. The failure to prepare for the problems of Cover Oregon has cost Oregon citizens dearly.

“We must get to the bottom of the Cover Oregon Cover-Up. If there has been fraud, waste, embezzlement or abuse of public trust, those responsible must be held accountable.  We must impose safeguards to prevent a repeat performance of this mess.  We must ensure all Oregonians have affordable, quality, patient-doctor driven healthcare. We must restore open, honest and accountable state government

In 2011, Governor John Kitzhaber’s chief healthcare advisors promised the Oregon Legislature that if a $48 million federal grant were approved to develop the state’s own health insurance exchange, the money would be carefully spent to benefit Oregon citizens, Richardson told his constituents.

Here’s what else Richardson had to say:

“Today, three years later, the status of Cover Oregon tells a grim tale--the promises were broken, nearly $200 million has disappeared and the Governor was distant and uninterested. In short, Cover Oregon is an abject failure. Cover Oregon has been a pointless waste of taxpayer money, costing thousands of Oregonians their health insurance.

“Cover Oregon spent a million dollars on a Quality Assurance team (Maximus), which raised the alarm with the Governor's Office every month for more than a year. Regrettably for Oregon, the Governor never acted on the reports and the entire Executive Branch ignored the Quality Assurance Team warnings.

"So what can be done now?  Instead of admitting that his own gross lack of oversight wasted $200 million of our money and caused this tragedy, the Governor has called for a $228,000 study. This new study is allegedly to determine the cause of the Cover Oregon failure.  In reality, it is an effort to save face at taxpayer expense and it is unlikely that a firm hired by the Governor will give an unbiased result.  Conveniently, this contractor is not required to disclose the results of its investigation to the legislature or to you, the public.  

“It’s time for answers to these and other important questions relating to Cover Oregon by demanding a federal audit of the entire Cover Oregon project.” 

Diane can be reached at [email protected].

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Oregon legislators should read this Oregonian Op-Ed published Jan. 28th. "Oregon businesses should chip in for universal health care study: Guest opinion" It's ironic that we are investing so much money in this epic failure--one that deserved the attention of ProPublica today.

Rep Richardson's analysis of the Governor and staff's interest and oversight is right on the mark. There is little excuse for the abject failure of the site and the program overall. Talk about "resting on your laurels"! My husband/business partner is one of the thousands who started out on Dec 10 and still has not received word from his chosen plan that his paper work from Cover Oregon has reached them. What an abysmal performance by all concerned - except for the alert IT folk who raised alarms to deaf ears. It is really indefensible to waste so much tax payer $$ by having no product to show for the millions.