Oregon Officially Kills Its Insurance Exchange

Oregon Gov Kate Brown signed a bill shutting down the troubled, and expensive, state health insurance exchange, Cover Oregon.

As the Supreme Court debates whether consumers in states on the federally facilitated marketplace will be able to maintain access to federal subsidies, Oregon has officially shut down its state-run health insurance exchanges, Cover Oregon.

The troubled exchange wasn’t even used during the recent open enrollment period. Instead, Oregonians signed up for healthcare coverage through HealthCare.gov. The state’s exchange has spent more than $300 million to launch a working website, but Oregon legislators have viewed it as a very expensive mistake.

While Oregon used HealthCare.gov during the second open enrollment period, Cover Oregon did continue to perform some functions, which will now be folded into other agencies. Oregon’s legislature voted in February to close the exchange and sent the bill to newly instated Gov Kate Brown.

And while Cover Oregon has already cost more than $300 million, the expenses will continue to pile up, according to the Associated Press. The state has accused Oracle America Inc, which was hired to build the exchange website, of fraud, false claims, breach of contract, and civil racketeering. However, Oracle says Oregon still owes the company $23 million for building the exchange.

Plus, it will cost $30 million to pay for adapting Kentucky’s Medicaid system—although the federal government promised to pay 90% of the cost leaving $3 million for Oregon.

The Oregonian has reported that if the Supreme Court does side with the plaintiffs when it announces its decision—expected to come in June—that Oregonians who benefited from the law may not be impacted right away.

Despite the fact that residents used HealthCare.gov in the last open enrollment, the fact that the state set up the legal structure and bureaucracy for a state-run exchange makes eligible for tax credits.

“So, despite that Cover Oregon's troubled technology never quite got off the ground, the state's premium tax credits doled out in 2014 are safe,” wrote Nick Budnick. “The 2015 picture is slightly more complicated. But the gist may well be the same.”