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Report: Federal exchange cheapest fix for Cover Oregon

Report: Federal exchange cheapest fix for Cover Oregon
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PORTLAND, Ore. (AP) - Connecting Oregon's health insurance exchange to the federally run marketplace would be the least expensive fix for the glitch-filled system, a report released Friday said.
It would take Cover Oregon five to eight months and $4 million to $6 million to link to HealthCare.gov, far below what it would take to correct existing problems with the online state exchange, according to an analysis by Deloitte Development LLC.
The exchange was supposed to allow individuals and small-business owners to buy insurance plans online, but it wasn't ready to launch on Oct. 1 as planned. Oregon is the only state where the general public still can't enroll online in health coverage in one sitting.
Fixing the existing website would cost $25.5 million to $57 million in development and maintenance costs just this year - not counting 2015 costs - depending on whether Cover Oregon keeps or replaces its main technology contractor, Oracle Corp., the report said.
Whether or not Oracle is replaced, completely fixing the existing technology would take a year and a half to complete - meaning the website would only be partially finished for the next open enrollment that begins Nov. 15.
The state has already paid Oracle $134 million for the exchange and is withholding $26 million.
It would take seven to nine months and cost $17 million to $20 million to buy and configure technology that's already working in another state, such as Connecticut, according to the Deloitte analysis, first obtained by The Oregonian and dated Feb. 10.
Oregon could also contract out the entire exchange function, or just the non-functioning small-business part of the exchange, to an outside vendor. That vendor would host and maintain the website and own the technology, and Oregon would pay a monthly fee.
New Mexico's exchange plans to use such a vendor in 2015 at a cost of $40 million, but the report says contracting out the entire exchange would risky.
But contracting out just the small-business portion of the exchange is low risk and would take five to six months to implement at a minimum cost of $18 million, the report says.
The state could also provide an additional enrollment channel that allows people to sign up directly with insurance companies at a cost of $2 million to $3 million. However, that option would still require Cover Oregon or the federal government to maintain an exchange.
"It is a preliminary report," said Cover Oregon communications director Amy Fauver. "It's part of a body of ongoing work that will be used by decision makers on how to move forward after open enrollment."
Fauver did not indicate when Cover Oregon would decide on which option to go with.

Portland company says it can fix Cover Oregon for less

Last month, a Portland tech company told KATU’s On Your Side Investigator Chelsea Kopta that it can fix the website for $10 million.

Joaquin Lippincott, founder and president of Metal Toad, wrote a letter to Gov. John Kitzhaber and told him about his company’s plan to build a new health insurance exchange with brand new technology that’s sleeker and less expensive.

"It is my fervent belief that if Oregon had used open source technology, the Cover Oregon launch would have been delivered on time at a fraction of the cost," he wrote the governor.

A Kitzhaber spokeswoman told KATU that Cover Oregon is considering all options.

In February, two Oregon lawmakers, both of whom are running for higher office, said that it was time to scrap Cover Oregon and go another direction.

State Rep. Dennis Richardson of Central Point, who is the presumed frontrunner in the Republican’s quest to unseat Democrat Kitzhaber from the governor’s chair, told KATU that he wants to end Cover Oregon in favor of the federal exchange.

And Rep. Jason Conger, R-Bend, said during a legislative committee hearing that he had “lost faith” that Cover Oregon’s problems could be fixed. He proposed that Oregonians should be allowed to buy health insurance directly from insurance companies and have those companies check for eligibility at the federal level.

Conger is running for the U.S. Senate seat currently held by Democrat Jeff Merkley.

At the same time several Democratic lawmakers have argued that the focus needs to be on getting the Cover Oregon website working.

(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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