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Cover Oregon expected to scrap failed state system, plug into federal exchange

Cover Oregon board members could decide Friday morning to junk the agency’s nearly $200 million nonfunctioning website and join the federal health insurance exchange.

The Cover Oregon Technology Options Work Group recommended Thursday that the agency responsible for the state health insurance exchange fiasco drop the local website and join the federal system. The recommendation goes to the full Cover Oregon board, which meets at 10 a.m. Friday, April 25, in Durham.

According to Alex Petitt, Cover Oregon’s acting chief information officer, said the switch would cost between $4 million and $6 million.

The Technology Options Work Group weighed options that included fixing the current system with a new information technology vendor, using another state’s exchange system or plugging into the federal exchange system. In the end, all other options were too expensive or would have taken too much time, Petitt told work group members Thursday morning.

The Oregon Health Authority and Cover Oregon had received about $305 million in federal funds to help create the online insurance exchange, spending about $200 million of that on the system that doesn’t function.

State officials spent more than $130 million on a contract with Oracle of Redwood Shores, Calif., to set up the exchange. A March evaluation of that work by First Data Corp. of Atlanta found lax oversight, communication problems and a loose contract that contributed to the state exchange failures.

The exchange, part of the federal Affordable Care Act, was supposed to give Oregonians an online marketplace of insurance options. Instead, the system has never worked. The state is using a call center to sign up customers for health insurance.

About 8 million people have signed up for health insurance through the federal online exchange.