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Oregon drops health portal, switches over to federal site

– After months of trying to get its problem-plagued online health exchange to work, Oregon on Friday officially gave up on the state portal and decided to switch to the federal website – the first state in the nation to do so.

An early adapter and early enthusiast of the Affordable Care Act, Oregon was once seen as the national leader in health care reform. The progressive state’s ambitious vision for its exchange, its colossal multimillion-dollar failure and the inability to fix the glitch-filled site illustrate the complexity of the health care 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, Cover Oregon, decided to ditch the exchange because fixing it would be too costly at $78 million and would take too long. Switching to the federal system will cost $4 million to $6 million and is the least risky option.

Oregon’s exchange is seen as the worst in more than a dozen states that developed their own online health insurance marketplaces. Oregonians must use a time-consuming, hybrid paper-online process to sign up for insurance.

The state also had to hire more than 400 workers to aid in the manual enrollment process – despite the $134 million Oregon paid its main technology contractor, Oracle Corp., to build the online exchange.

Oregon received a monthlong extension of the enrollment deadline because of the technology problems.

Other states that have experienced major problems with their exchanges are also debating their futures – although it’s unclear how many, if any, will switch to the federal portal.

Maryland has decided to replace its site and adopt the technology used on Connecticut’s successful exchange.

Of the 14 states and the District of Columbia that built their own exchanges, some portals are running smoothly, including in California, Washington state, Connecticut and Kentucky.

But in a half-dozen states, technical troubles have cropped up after exchanges were launched in October, marring implementation of the health care overhaul.

Exchange glitches have led to states firing technology contractors, exchange leaders resigning, cost overruns and officials trying to figure out how – or whether – to salvage their portals.

Exchange leaders from Massachusetts, Maryland and Oregon plan to meet with officials at the federal Centers for Medicare & Medicaid Services to iron out the details of their exchanges’ futures.

Republicans blasted Cover Oregon after its board approved ditching the beleaguered site.

“Today’s decision by Cover Oregon to move to the federal health exchange after months of false assurances is an incredibly embarrassing moment for the state of Oregon,” said state Rep. Mike McLane, R-Powell Butte. “Oregonians were sold false promises, and all we got was a faulty, unfinished product.”

But Cover Oregon officials defended the exchange and its technology work.

“There’s a lot of disappointment. There was a lot of passion for the project,” said Clyde Hamstreet, Cover Oregon’s interim executive director. “But I don’t think it’s all a waste. There’s a lot of value in what’s been done.”

Despite the exchange’s technology fiasco, about 242,000 Oregonians have enrolled in coverage through Cover Oregon. An estimated 70,000 of those enrolled in private health plans, while 172,000 enrolled in the Oregon Health Plan.

In March, the federal Government Accountability Office announced an investigation of Oregon’s exchange, including looking at whether the federal government can reclaim grant money given to Cover Oregon if taxpayer funds were mismanaged.

An independent investigation ordered by Gov. John Kitzhaber found that state managers repeatedly failed to heed reports about technical problems that prevented the Cover Oregon exchange from launching.

It also found that Oracle did a shoddy job in building the exchange. Five Oregon officials connected to the development of the Cover Oregon portal have resigned.