Partisan Political Interests Behind Cover Oregon Obamacare Exchange Debacle

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Posted by Alexander Hendrie on Tuesday, January 19th, 2016, 6:00 AM PERMALINK

newly uncovered email confirms accusations that the $305 million Cover Oregon Obamacare exchange was controlled by partisan political advisors working for then-Governor John Kitzhaber’s 2014 reelection effort.

Public documents previously obtained and examined by Willamette Week suggested that decisions over the fate of the now-failed exchange were given to partisan political operatives – led by a trusted aide of the governor known as “the princess of darkness.” This new email all but confirms these accusations.

The email – dated May 15 – was between the head of the Cover Oregon board and another member regarding management of the failed exchange. The board member laments that decisions are made entirely by a state agency and the governor’s advisors:

“At this point, at best, its become just an advisory board – worse case, the board simply is acting as a public pass through of decisions already made at the state agency or by the governor’s advisors.”

At the time of the email, the state had just announced it was shutting down Cover Oregon and transitioning to the federally run The exchange had been subject to national criticism for failing to work by its scheduled November 2013 launch date – or for months after this deadline.

It quickly became an embarrassment for the governor, who had fashioned himself as a reformer of healthcare.                              

Behind the scenes, the Cover Oregon debacle reached such alarming levels that the Governor allegedly placed top aides in charge of the board early in the year, in an attempt to mitigate any damage to his reelection bid. The newly uncovered email confirms this charge:

“My perception is this has always been an issue, however, it’s certainly become more & more apparent since January.”  

While Kitzhaber did win reelection, he was forced to resign months later amid a public corruption scandal involving his fiancée's misuse of public office.

In the meantime, the transition to the federal system cost an additional $41 million in mostly federal funds. Previously recovered emails have suggested that Kitzhaber’s aides shut down the exchange 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 to taxpayers – it is not alone amongst Obamacare state exchange debacles.

In all, the cost of failed and failing Obamacare state exchanges reaches in the billions – with exchanges also shutting down in Hawaii, New Mexico, and Nevada, and others in Vermont, Massachusetts, and Maryland failing to work months and years after their intended launch date.

There may be more pain to come – at a recent House Energy and Commerce Oversight Subcommittee hearing, Obamacare Chief Andy Slavitt was unable to confirm that remaining state exchanges would become self-sustainable as required by federal law.

Given this possibility, Congress should step up to ensure stronger oversight over the remaining state exchanges. At the same time, Congress needs to continue investigations into failures in Oregon and elsewhere to ensure taxpayer funds are recovered wherever possible. 

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