Oregon on Friday became the first state to cancel its online health exchange and use the federal marketplace instead.
According to The Associated Press, fixing the state's online exchange would cost an estimated $78 million. Switching to the federal system would cost $4 million to $6 million.
The state's site still isn't fully functional. Reuters reports that technical glitches have prevented any subscribers from enrolling online. Tens of thousands of applicants have had to use paper forms since the site launched on October 1.
An advisory committee suggested Oregon move the Medicaid portion of health care coverage to the Oregon Health Plan. For Medicaid consumers, the transition should appear seamless, officials told Reuters.
Oregon's exchange is seen as the worst of more than a dozen states that developed their own online health insurance marketplaces. Officials in Maryland and Massachusetts also considered shifting their state-run exchanges to the federal network after experiencing technical problems. Maryland recently decided to spend $40 million to $50 million to adopt the technology used on Connecticut's successful exchange.
Oregon received a total of $305 million in federal funding. As of March, the state has spent nearly $248 million of that money, Cover Oregon officials told The Associated Press. Most of that money went toward the botched portal: $134 million in federal funding was paid to Oracle Corp. for building the exchange, and an additional $7 million was spent on paper processing efforts. Currently, Oregonians must use a hybrid paper-online process to sign up for insurance.
The Government Accountability Office is investigating whether the federal government can reclaim grant money given to Cover Oregon. Separately, former Health and Human Services Secretary Kathleen Sebelius asked for an inspector general's probe into problems with the site's rollout. An independent investigation ordered by Oregon Gov. John Kitzhaber found state managers repeatedly failed to heed reports about technical problems that prevented the exchange from launching. It also found Oracle did a shoddy job in building the exchange. Five Oregon officials connected to the development of the Cover Oregon portal have resigned.