SALEM, Oregon — A U.S. House committee has found former Gov. John Kitzhaber and a federal agency mishandled the creation of Oregon’s health insurance enrollment website, with the Democratic governor’s political advisers making decisions based on his re-election campaign.
In a report released Wednesday, the committee said it’s asking the Justice Department and state attorney general to conduct criminal investigations into the actions involving Cover Oregon.
“More than $305 million in federal taxpayer dollars were sent to Oregon state for purposes of implementing a state exchange to benefit the people,” the committee said in a letter to U.S. Attorney General Loretta Lynch. “The state exchange never came to fruition, and the money is gone.”
The Republican-controlled Committee on Oversight and Government Reform said its investigation showed state officials misused federal money and improperly commingled official and political resources to enrich Kitzhaber’s political prospects.
Oregon produced the country’s worst rollout of the new national health insurance program. While the crippled federal website eventually worked, Oregon’s failed to enroll a single person online. The state had to resort to hiring 400 people to process paper applications.
The Centers for Medicare &Medicaid Services’ “failed oversight of the development and implementation of Cover Oregon resulted in millions of wasted taxpayer dollars,” the committee said. The federal agency should reform its grant and oversight process, the panel said.
The committee said documents and testimony it obtained are consistent with the findings of the Government Accountability Office, a congressional watchdog agency. The committee report also noted Cover Oregon is not unique.
“Several other states have had significant problems developing and implementing a health insurance exchange,” the report said.
An email seeking comment from Kitzhaber early Wednesday morning through his fiancée, Cylvia Hayes, wasn’t immediately returned. Representatives from CMS also didn’t immediately return a request for comment.
In other findings, the committee said:
Oregon decided the state should establish a state-based system and was awarded more than $300 million in federal grants, but the state-supported platform was then abandoned for HealthCare.gov, a federal platform, and was permitted to use it for free.
Officials with the Centers for Medicare &Medicaid Services applauded the progress at Cover Oregon and awarded the project additional federal dollars even as the quality assurance vendor rated the project as “high risk.”
State officials and Kitzhaber’s campaign advisers “collaborated to such an extent that the lines between official and political activities became blurry.”
The Centers for Medicare &Medicaid Services didn’t adequately monitor and address the “excessive involvement” of Kitzhaber’s staff and campaign advisers in Cover Oregon policy decisions.
Kitzhaber’s re-election campaign was concerned about media coverage of Cover Oregon and wanted to change the narrative.
Kitzhaber resigned in February 2015 amid allegations that his fiancee, Cylvia Hayes, did private consulting work for organizations seeking to influence state policies. The report noted discussions about Cover Oregon often included individuals with no authority over the matter, and it found that at least one email included Hayes, “who did not have any Cover Oregon role or responsibilities.”
In March 2015, Gov. Kate Brown signed legislation dissolving Cover Oregon.
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