Oregon to Set up Second Obamacare Exchange After Breaking the First One

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Posted by Alexander Hendrie on Thursday, March 24th, 2016, 8:00 AM PERMALINK


Even though taxpayers haven’t recovered one cent of the $305 million spent constructing Oregon’s failed Obamacare exchange, the state may soon build another one.

As reported by Portland Business Journal, the Oregon state government has received several submissions for the construction of a new state based exchange.

Given the failure of the Cover Oregon exchange, the last thing the state should do is construct a new exchange. Needless to say, it must receive no federal financing.

The state is currently using the federally run Healthcare.gov system and pays a 1.5 percent user fee, which amounts to close to $10 million a year. 

With that fee set to double in coming years, Oregon apparently believes it can make an exchange that works more efficiently, and they can do it on the cheap. But officials only need to look back a few years to see the flaws in this thinking.

The original Oregon exchange was a complete embarrassment for the state and received national criticism for failing to work by its scheduled November 2013 launch date or months after that.

Weeks after this first deadline, the exchange had enrolled zero applicants, forcing officials to install dozens of extra fax lines so that applicants could fax in a 20 page document.

Behind the scenes, then-Governor John Kitzhaber placed top campaign aides in charge of the board in early 2014 to manage the problem for his upcoming election.

Eventually, the state decided to shutter the exchange and transition to the federally run Healthcare.gov at an additional cost of $41 million.

Recently recovered emails have confirmed accusations that Kitzhaber’s aides shut down the exchange  for political reasons and spent this additional money moving to the federal system even as Cover Oregon's infrastructure was close to 90 percent complete.

While Oregon’s $305 million federally funded system was extremely costly for taxpayers across the country, it is not alone amongst Obamacare state exchange debacles.

Despite $5.5 billion in taxpayer funds being spent on state exchanges, a report released late last year found just $1 million had been returned to the federal government.

Today, the list of exchanges that have wasted taxpayer funds Vermont, Minnesota, Hawaii, Maryland, Massachusetts, Nevada, and New Mexico.

Responding to questions stemming from a settlement between Maryland and a vendor working on the state’s exchange. Obamacare chief Andy Slavitt recently said the federal government will “recover its fair portion” of funds from failed state exchanges.

Despite these comments, Oregon has not yet paid the federal government back for their first failed exchange.

Taxpayers have already seen billions wasted on failed and barely functioning state exchanges. Given the disaster that was Cover Oregon, federal officials and taxpayers should have no part in Oregon’s new state exchange.

 

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