Oregon to borrow from Kentucky’s exchange

Oregon will scrap its troubled Medicaid enrollment project and replace it with Kentucky’s system, which is regarded as one of the best in the nation, state officials announced on Monday.

The decision makes it official that Oregon will transition away from using the Oracle systems that it spent $240 million in federal funds to obtain and build.

Oracle software was supposed to be the foundation of Oregon’s exchange, a one-stop shopping and enrollment website for health coverage. Instead, the state encountered a multitude of large technical glitches and a firestorm of complaints from customers who struggled to enroll in the exchange.

Oregon officials looked at eight different states and their systems before deciding on Kentucky’s. Oregon will use a portion of Kentucky’s successful health insurance exchange project, which was built in one year using $253 million in federal funds – about the same amount Oregon paid to build its flawed system.

In October, Oregon announced it would no longer try to rescue some portion of the $300 million-plus exchange project.

Officials said Oracle did not cooperate with the state’s latest request for help. They admitted that Oregon’s Aug. 22 lawsuit accusing Oracle of racketeering and fraud seemed to be a factor.

While there is no cost for Oregon to obtain Kentucky’s programming code, the state has budgeted about $30 million for its new Medicaid project. The funds will pay for the cost of adapting Kentucky’s system to Oregon. State officials say the federal government has agreed to pay 90 percent of the cost of the new project.

Oregon was one of 15 states opting to build its own exchange instead of initially going with the federal model. The states that built their own platforms have seen varying levels of success, with some, such as Kentucky and California, flourishing, while those in Oregon, Nevada and Maryland struggle.

Maryland, in fact, followed a similar path that Oregon is now facing. After struggles of its own, Maryland junked its failed exchange for the one used in Connecticut, which also had an incredibly successful rollout. Maryland, to date, has not reported any problems with its exchange during the current open enrollment period.

Oregon’s exchange has been recognized as one of the worst in the country as citizens are required to use a time-consuming process that involves using the website and submitting paper materials. An independent investigation ordered by Gov. John Kitzhaber found state managers repeatedly failed to heed reports about technical problems that prevented the Cover Oregon 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. Kitzhaber has insisted communications about the portal’s troubles never reached him as the planned Oct. 1 launch last year neared.