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Oregon’s Obamacare Disaster

The opinions expressed by columnists are their own and do not necessarily represent the views of

Cover Oregon was the health insurance marketplace that the state set up pursuant to Obamacare for citizens to shop online for health care.  It is now defunct.  Cover Oregon is a case study in government incompentence and corruption.


The $300 million the state got from Washington to build its exchange remains up in smoke. The state continues to pursue a lawsuit against its vendor, mostly, it seems, to drive up billables for a Portland law firm connected to John Kitzhaber, the former governor forced from office as the exchange was collapsing.

About 170,000 people tried to sign up for Cover Oregon before it folded. But none succeeded because of a series of problems that forced employees to take applications by hand and through call centers.

A management consultant who has followed the project closely said Oregon remains “much more at fault” than the vendor for the breakdown. “Oregon screwed its population on this project,” he consultant said.

What is news is the alarming number of places where the story of Oregon is familiar. Any claims the law is succeeding as designed are belied by a string of failures, misuse of funds and defiance by the administration of the clear language of the law.

Some, such as looting of a fund that was supposed to pay promised transition insurance, doesn’t even have to do with exchanges. Others, such as unilaterally rolling back lawful deadlines for compliance with various aspects of the law, reflect contempt for our system of checks and balances.

But the exchanges have produced their own dismal record.

More than a dozen have failed, and 22 of 23 lost money in 2014, according to the inspector general for Department of Health and Human Services.

The Government Accountability Office says only about a third of the $4.5 billion the federal government gave to states to establish the IT functions of their exchanges was spent on IT. The rest – about $3 billion – is mostly unaccounted for because of lax accounting practices and confusing assignments of duties.


Still other dollars involved have been spent on things that had nothing to do with building an Obamacare state exchange, such as the $1 million misspent in Arkansas that was revealed by Sen. Jon Cornyn, R-Texas, last week.

And now we’re hearing of a blue states slush fund. Noridian agreed to pay $45 million for its part in the failed Maryland exchange. But the federal government has told Maryland it could keep $13 million of the settlement, even though this is specifically forbidden in the law. No explanation for why this money should be given to Maryland with no authorization from Congress has been forthcoming.

Obamacare was never a sound idea. The day it passed, 85 percent of Americans had health insurance and liked it. Today, a lower percentage have it and even fewer like it. And most of its customers were forced onto the exchanges by other Obamacare policies that pushed them off the plans they had and liked.

It has cost more than projected, produced less in savings for consumers, garnered President Obama a Lie of the Year award for his claim people who liked their plans and doctors could keep them and produced massive wasted and mismanagement.

It has forced some Americans off their health plans and others out of full-time jobs and into part-time positions or no work at all.

Andy Slavitt, director of the Centers for Medicaid and Medicare Services, told Congress recently about all the work that went into making state exchanges run efficiently.

States were subject to monitoring to ensure they meet the terms of the grant – the $1 million missing in Arkansas was discovered through this process, he said.


They received technical support, help with their vendor selection processes and advice on how to better administer their contracts and refine contractor-monitoring activities. Numerous reports are required every month, quarter and year.

None of this helped in Oregon or any of the other dozen states where exchanges have failed. In virtually every case, lackluster management of vendors and a lack of accountability contributed to the problem. The states didn’t own the program, so they did the bare minimum they could to receive the grants.

This is no way to run a government, although it frequently is the way government is run. The argument is not for more efficient or effective government – that was tried here. The argument is to reduce the size, scope and cost of government and return decision-making to the people.

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