State Officials Explain Process to Abort Cover Oregon to Legislators

Gov. John Kitzhaber holds firm in his opinion that Cover Oregon needs no legislative approval or special session to scrap its portal for the federal exchange, despite an opinion from legislative counsel that says otherwise.

State officials on Tuesday worked to downplay the drama in their decision to pull the plug on Cover Oregon as well as buck the public conception that the $248 million given to the failed state insurance exchange was wasted.

A top aide of Gov. John Kitzhaber, Sean Kolmer, also reiterated the governor’s position that a special session will not be needed to end Cover Oregon and that it’s within the purview of the executive and the Cover Oregon board to scrap the failed exchange without legislative approval.

“Everything we’ve been talking about is within Cover Oregon’s existing statutory authority,” Kolmer said.

Last week, Oregon House Republicans championed a legal opinion from the state’s legislative counsel that argued the Cover Oregon board lacked statutory authority to abort the state-based exchange for the federally-run website,, a decision reached by the board.

“The governor is exercising executive authority without respect for the legislative branch of government,” Rep. Dennis Richardson, R-Central Point told The Lund Report. Richardson is the leading Republican contender to challenge Kitzhaber for governor.

But only Speaker Tina Kotek and Senate President Peter Courtney, both Democrats, would be able to call Kitzhaber’s bluff on the division of governmental powers, an unlikely move against the leader of their party.

Neither Richardson nor Rep. Jason Conger, R-Bend, when reached for comment, doubted that the switch to the federal exchange was the inevitable decision that the state was forced to make.

Interim Cover Oregon Director Clyde Hamstreet said switching to the federal exchange will cost $5 million out of the exchange’s remaining $54 million in grant money. Switching to another state’s technology could have cost at least $45 million and keeping an independent exchange using the Oracle software would have cost another $75 million, and still not likely have been fully functional in time for next year’s open enrollment in November.

But Cover Oregon won’t go away completely because the state is forming a partnership with the federal exchange similar to Idaho, Arkansas and Illinois. The Oregon Insurance Division will continue to review and approve rates for qualified health plans, and Oregon will also approve what plans are on the exchange.

Cover Oregon also must continue to operate with its manual sign-up system until the next open enrollment on Nov. 15. Thousands of people will still be eligible to sign up before November for Medicaid or buy a subsidized private plan if they have a qualifying life event, such as a move or change in income.

But when consumers go to select a plan starting Nov. 15, it will be and its technology that they will turn to, with remaining as an educational-only site, if it survives at all.

A panel of four top officials who are currently responsible for many of the decisions regarding the crippled exchange testified before a Joint Information Technology and Audits Committee meeting of the Legislature. It was the first public interaction between lawmakers and Cover Oregon officials since the exchange board voted to scrap the state exchange in favor of the federal healthcare portal last month.

Cover Oregon has been reeling from local scrutiny for months but it has more recently become the laughingstock of the nation with HBO comedian John Oliver lampooning the state’s dopey ads and ridiculing Oregon for accepting $250 million without enrolling a single person online.

Much of that money was spent on Oracle’s technology services that never worked properly and now will be mothballed, but Oregon Chief Information Officer Alex Pettit said the Oregon Health Authority will be able to use the Oracle infrastructure as it takes back the Medicaid enrollment program from Cover Oregon.

The state officials also spun the message to focus on  the 308,000 people who did enroll in health coverage since Jan. 1 despite the technology failures. However, all but 75,000 of these people got free coverage through Medicaid. Oregon did prove a national leader with its Medicaid expansion, coming in 6th by population. Its private plan enrollment was a mediocre 38th by population.

Rep. Mitch Greenlick, D-Portland, continued to excoriate Oracle for its shoddy work and role in the state’s failure to operate its own exchange, but Pettit explained the trickiness of simply parting ways with Oracle or asserting any leverage over the company.

“We need to maintain that relationship,” he said. “Oracle is a significant provider of software as well as hardware to the state of Oregon.” Beyond Cover Oregon, the state is heavily invested in Oracle technology and its subsidiaries, such as Sun Microsystems, he said. That interdependence will go on despite the state’s frustration with Oracle’s failure to provide a working website for Cover Oregon.

Chris can be reached at [email protected].
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How else can we look at this than other $248 wasted?  Not enough money to adequately fund our community college and k-12 system but $248 MILLION down the drain.  I have a friend trying to get her son in a PUBLIC kindergarten in Portland this is a "Creative Science" program in a working class, ethnically diverse neighborhood in Portland. This program cost $400 a MONTH FOR PUBLIC KINDERGARDEN.  The students selected for this program are white children whose parents can afford the $400 a month NOT the neighborhood children.  Neighborhood children are SHUT OUT.  Think how far that $248 well spent could have gone to improving educational opportunities for all Oregonian children.  

This is a crime.  It is so, so, so sad that we don't have politicians with COURAGE to make Oracle PAY!!  How many people are in JAIL for SHOP LIFTING.  I would say this is SHOP LIFTING in a whole different level.  Too big to prosecute!!