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“Cover Oregon is a train wreck…”

“Cover Oregon is a train wreck…”


 <<< Conger: $200M wasted, time to shut Cover Oregon down >>>

…Oregon Catalyst – January 21, 2014…

 Cover Oregon Has Spent $200 Million; Rep. Jason Conger Says it Should be Shutdown

PORTLAND, ORE – Rep. Jason Conger (R-Bend) renewed his call to shut down Cover Oregon in light of new information showing that $200 million has been spent out of roughly $300 million in federal grant money the state received to build its health insurance exchange.

“Cover Oregon is a train wreck, and the more we learn the worse it gets,” Conger said. “We now know that $200 million has been spent – and the website still doesn’t work.“

It has been unclear how much money has been spent on Oregon’s online exchange. Yesterday Cover Oregon’s acting director, Dr. Bruce Goldberg, confirmed that federal grants totaled $300 million and that Cover Oregon and the Oregon Health Authority had spent an aggregate of $200 million in an e-mail response to written questions submitted by Rep. Jason Conger.

“It is time to shut Cover Oregon down and look at other options,” Conger said. “Thousands of Oregonians who have lost their health plans will have to pay the Obamacare tax because they did not purchase health insurance from the exchange.  But the exchange doesn’t work.”

“After all the delays and broken promises, I have lost faith in Cover Oregon.  Even if the website is salvaged, it looks increasingly likely that the Cover Oregon business model will never be self-sustaining,” Conger added. “It would be foolish to waste more taxpayer money on a failed system that will never work as promised.  It is time to look at affordable, reliable alternatives that will actually allow Oregonians to purchase health insurance.”

Last week, Rep. Conger also sent a letter to Gov. John Kitzhaber urging him to shutdown Cover Oregon and seek a federal waiver that would allow individuals to bypass the exchange and qualify for federal tax subsidies by purchasing health insurance from private carriers. The Governor has not yet responded.

The details of funds received and spent from Dr. Goldberg’s email appear below.

Total grants awarded to State of Oregon from Sept 30, 2010 through Dec 31, 2014:
OHA:  $60,917,212
Cover Oregon:  $244,289,375
TOTAL REVENUES:  $305,206,587

Actual expenditures/drawdowns through Dec 31, 2013:
OHA:  $60,917,212 (assume 100%)
Cover Oregon:  $109,407,968
Costs incurred to date but not paid (includes IT costs incurred but not yet paid):
Cover Oregon:  $28,874,508 (excludes unbilled costs)

BALANCE:  $106,006,899




Then in a follow-up article on January 23, the Oregon Catalyst reported that calls to end Cover Oregon were premature.  Cover Oregon Acting Executive Director Bruce Goldberg said the state will be in a better position to make that choice in a couple of months. It’s possible, he said, the site could be fully functional by then. Of the 48 “critical problems” facing the website, programmers are down to 13.

The state has so far enrolled more than 65,000 people, 23,000 of which are in private insurance, through paper applications. But some have slipped through the cracks and were unable to enroll.

Officials have been back and forth for months, extending the date when the website likely could be fixed. Many lawmakers are growing impatient.

“I have no confidence that many of the same individuals, agencies and companies that presided over this on-going disaster are in a position to salvage the state website,” state Rep. Jason Conger, wrote in an email to Gov. John Kitzhaber. “Indeed, I don’t believe they should be afforded yet another chance to fail — I have simply lost faith in this whole project.”

Conger, a Republican, has announced he’s running for the U.S. Senate seat held byDemocrat Jeff Merkley. He also sits on the House health care committee, one of two committees that grilled Goldberg on Wednesday over the Cover Oregon “train wreck.” Conger also said he wants a clearer picture of how much it’s costing to fix the problem.

Many other Oregonians are wondering the same. A response to a public records request from Northwest Watchdog shows what some of those costs will be. Some questions asked by Northwest Watchdog could not be answered, but officials say the information is being gathered.

Goldberg said the state can pay for the fixes within the budget by cutting other areas, such as future staffing and advertising. As of Nov. 30, Cover Oregon and the Oregon Health Authority have spent $166 million, including the cost to build the website and grants from the federal government.

Here’s a breakdown of the known and unknown costs of the Cover Oregon debacle and the dollars it might take to fix it.

$3.3 million: 400 plus employees hired to process paper applications. About $1 million of that came from Cover Oregon and the rest from the Oregon Health Authority from money saved through the state’s fast track Medicaidenrollment program, Goldberg said.

$228,000: The governor’s office has contracted with First Data GovernmentSolutions to conduct an independent review of the Cover Oregon website to find out what went wrong. Matt Shelby, communications strategist for the state’s chief operating officer, told Northwest Watchdog this is a fixed contract so the cost shouldn’t go up. Some lawmakers questioned the need for this during the legislative hearing, saying it shouldn’t cost the state to figure out what went wrong.

20 percent: Amount of the Cover Oregon budget that will have to be cut if the agency meets its lowest tier of enrollment projections. “We would be looking at all expenses, one of which is advertising,” Cover Oregon spokeswoman Ariane Hold toldNorthwest Watchdog.

Cover Oregon will also try to recoup more than $20 million from Oracle, the IT company that set up the website.

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