U.S. Demands Oregon Insurance Exchange Documents

By Christine Kern, contributing writer

Cover Oregon scandal deepens: did the state miss investigation into ex-website chief?

Cover Oregon, Oregon's troubled health insurance exchange website and possibly one of the most dysfunctional and expensive coverage marketplace flops in the nation, has come under the investigation of a federal grand jury.

One of four failed state exchanges, Oregon abandoned its plans for an independent online exchange after it failed to launch and state officials said fixing it would be too time-consuming and expensive. Instead, Oregon last month decided to switch to the federal portal, becoming the first state to do so.

The state paid its independent contractor, Oracle Corp., $134 million in federal funds to build what turned out to be a glitch-filled site. Instead of signing up for health insurance in one sitting, Oregonians had to use a paper-online process that was costly and slow. According to The Oregonian, the FBI and HHS have launched a preliminary inquiry, issuing subpoenas, into Cover Oregon, which was scrapped last month after the state sunk $250 million into the failed health care exchange.

Ironically, Oregon was not only an early adapter and early enthusiast of the ACA, but it was also seen as a national leader in health care reform. Now it has become the poster child for the complexity of the healthcare law and the challenges for states that decided to build their own exchanges.

Oregon, which so far has failed to enroll a single person in coverage in one sitting through its exchange, decided to ditch the exchange because officials said fixing it would be too costly at $78 million and would take too long. Switching to the federal system will cost just $4 million to $6 million and is the least risky option. Of the over a dozen states that developed their own health insurance marketplaces, instead of using the federal exchange, Oregon reportedly has the worst exchange.

The subpoenas, issued to both Cover Oregon and the Oregon Health Authority responsible for the early technology development of the exchange site, demand records of communications between state officials involved in developing the website, five of whom have resigned. They include Bruce Goldberg, former head of the Oregon Health Authority; Rocky King, former Cover Oregon executive director; and Carolyn Lawson, the health authority's former chief information officer.

Also included in the subpoenas are all communications with the federal government about the status or functionality of the website, communications about federal funding reviews, and lists of people attending the reviews.

All documents must be turned over by June 6. The agencies released a joint statement, stating, "We will work collaboratively with the U.S. attorney's office to provide any and all information we have and make any and all staff available to assist.”

An investigation ordered by Gov. John Kitzhaber found state managers failed to heed reports about problems that prevented the website from launching. It also found Oracle did a shoddy job in building the exchange.