Oregon to abandon O-Care exchange

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Oregon is set to become the first state to drop its ObamaCare exchange and transition into the system managed by the federal government.

The decision follows months of severe technical issues that have made Oregon's marketplace one of the worst in the country.

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About $130 million has been spent on Cover Oregon, but it is the only ObamaCare enrollment system that won't let registrants buy coverage and qualify for tax credits in one sitting. 

It had not enrolled a single person online as of early March, and remains mired in glitches almost seven months after a rocky launch. 

Alex Pettit, the state's chief information officer, recommended to an advisory board Thursday that the state hand the reins to the federal government. 

Members of the panel appeared to agree, The Oregonian newspaper reported. The board will meet again on Friday morning to further discuss the issue, and perhaps hold a vote. 

Pettit will reportedly travel to Washington, D.C. next week to pursue the transition with federal health officials.

Republicans pointed to the shift as evidence of problems with the Affordable Care Act. 

“Cover Oregon wasted over $200 million and is the poster child for what’s wrong with ObamaCare’s state exchanges," said Republican National Committee Chairman Reince Priebus in a statement.  

Priebus slammed Gov. John Kitzhaber (D-Ore.) and Jeff Merkley (D-Ore.), both up for reelection, as "responsible" for the site's inception. 

The Obama administration has urged Oregon and other states with dysfunctional exchanges to integrate them with HealthCare.gov.

If federal health officials agree to the terms, Oregon will join the 34 states that currently plan to rely on HealthCare.gov as their primary ObamaCare enrollment portal next year. The next sign-up period begins in November.

Officials with Covered Oregon confirmed the recommendation from Pettit and released a draft of the  his Powerpoint presentation to the committee. 

Fixing the site would cost $78 million compared with $4 to 6 million to house the system within HealthCare.gov, the slides said. 

The decision is a significant shift for an exchange that was expected to run well.

Oregon is mostly run by Democratic supporters of the healthcare law and known for its innovations in healthcare policy, signs that initially boded well for its ObamaCare enrollment system.

But the website has become an embarrassment for the state, and improving it before the next enrollment period would have been challenging and expensive.

In Congress, requests from Democrats and Republicans have triggered a federal investigation of the broken system. 

The Government Accountability Office (GAO) agreed last month to probe what happened to the $304 million in federal grants provided to Oregon to build its website. 

Two sets of lawmakers had requested the study: Sens. Merkley and Ron Wyden (D-Ore.) in one letter, and four Republican members of the House Energy and Commerce Committee in another.

The agency said it would combine the investigation with a "broader study planned to examine states' health exchanges websites."

"In these unique circumstances GAO will conduct one body of work but issue multiple products," a letter to Merkley stated.

Republican members have raised hopes that some of the federal grant money given to Oregon contractors could be returned.

"The catastrophic breakdown of Cover Oregon is unacceptable, and taxpayers deserve accountability," the GOP lawmakers, led by Rep. Greg Walden (R-Ore.), wrote to the GAO. 

State officials have blamed the contractor primarily responsible for the website, Oracle. The exchange was reportedly pursuing Deloitte as a replacement earlier this month.

Many top officials have also resigned, some as recently as this week.

“[Cover Oregon] is the worst financial failure in information technology in state history-and it was completely avoidable. Today's admission of failure underscores the need to stop the waste and get the truth,” Walden said in a statement Thursday.

“How did this happen? Who was in charge? That's why I've sought and secured a federal investigation into Cover Oregon. Taxpayers deserve answers and demand accountability."

— This story was updated at 4:22 p.m.