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White House prepares to take over Oregon’s broken health exchange

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The Washington Post
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The Obama administration is poised to take over Oregon’s broken insurance exchange, according to officials familiar with the decision, who say that it reflects federal officials’ conclusion that several state-run marketplaces may be too dysfunctional to fix.
In public, the board overseeing Cover Oregon is scheduled to vote Friday whether to join the federal insurance marketplace that already sells health plans in most of the country under the Affordable Care Act. Behind the scenes, the officials say, federal and Oregon officials already have privately agreed that closing down the system is the best path to rescue the state marketplace, the country’s only one to fail so spectacularly that no residents have been able to sign up for coverage online since it opened early last fall. The collapse of Oregon’s insurance marketplace comes as federal health officials are also focusing intensely on faltering exchanges in two other states, including Maryland.
Earlier this month, the board for the Maryland Health Connection became the nation’s first to decide to replace most of its exchange with different technology. But Maryland did not obtain required federal approval before its vote. And federal officials have not indicated whether they will give the state the $40 million to $50 million that it needs to make the switch - and remain uncertain whether the state exchange has the capacity to correct its own problems.
The third state that is the focus of special federal scrutiny is Massachusetts, which was in the vanguard of insurance exchanges, opening its own years before the 2010 federal health-care law. But the commonwealth’s insurance marketplace has developed severe technical problems as it attempted adjustments to interact with the federal system. Taken together, the federal uneasiness about these and other failing state insurance exchanges is a second-generation problem that is drawing attention now that the federal marketplace, HealthCare.gov, has improved enough to attract 8 million Americans who enrolled during the first sign-up period that has just ended.
The fate of these state-run exchanges has significance both politically and for consumers.
When the Affordable Care Act was enacted, the law’s authors envisioned that virtually every state would build its own exchange - intended for people who cannot get affordable insurance through a job and for small businesses. Yet only 14 states, plus the District, have created their own exchanges. In the remaining three dozen states, Republican governors and legislators, as part of the intense GOP opposition to the law, have left their residents to rely on the federal insurance marketplace, which opened for business last October.
Some of the 14 state-run marketplaces have prospered, but others have been failures - essentially painting a political stain on Democratic statehouses that were the most enthusiastic in embracing the federal health-care law. In addition to the three states that are currently the focal point of administration officials, exchanges have faltered in a few other places, including Hawaii and Minnesota.
In each of the defective state exchanges, consumers have had trouble to various degrees in signing up for health plans. Oregon’s consumers have been the only ones who have had to resort entirely to cumbersome paper applications, because its website has never allowed individuals to apply electronically. Just under 64,000 residents have enrolled in private health plans there.
Like in Maryland, Oregon’s governor, John Kitzhaber, D, has been an outspoken proponent of the federal health-care law and the state has, in general, been a leader in innovative policies to promote access to health care and other social services for people in need of help.
A consultant’s analysis for Cover Oregon recently concluded that it would cost $4 million to $6 million to move into the federal insurance marketplace, a fraction of the expense of refurbishing the exchange’s existing technology.
According to the officials, who spoke on the condition of anonymity about discussions that have not been made public, leaders of the federal Centers for Medicare and Medicaid Services, the agency overseeing the insurance marketplaces, have firmly told Oregon officials that they did not believe they had the ability to repair the exchange themselves. The two sides have been negotiating the details of how the transition will work, including exactly how much help the federal government will furnish. The negotiations are expected to conclude in a series of meetings in Washington early next week between federal health officials and exchange representatives from Oregon, Maryland and Massachusetts.
For Oregon, one important unresolved question is whether people who have just chosen health plans through Cover Oregon will need to sign up a second time in the federal system for their new coverage to continue beyond this year.
On Thursday, a tech working group for Cover Oregon reached an informal consensus to recommend to the governing board that it join the federal insurance marketplace.
A spokeswoman for Cover Oregon disputed the idea that the decision is a fait accompli. “The Cover Oregon board is the only group with authority to make decisions about next steps,” said the spokeswoman, Ariane Holm.
Story tags » Health

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