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April 30th, 2014 5:33 pm
Oregon Scraps $248M ObamaCare Exchange

Oregon spent $248 million developing its own ObamaCare insurance exchange and never enrolled a single person online.

That kind of return on investment convinced state officials “to abandon the exchange entirely and switch to the federal website, the first state to do so,” writes Lou Cannon. “The Oregon board made its decision after being told it would cost $78 million to fix Cover Oregon compared to $4 million to $6 million to make the technical changes needed to join the federal exchange.”

Investigations are ongoing into why the state’s heavily bankrolled website was such a bust. Once thought to be a model for progressive high-tech governing, Cover Oregon is now a source of embarrassment for the state’s Democratic establishment.

Whatever the causes for the technology failure, Oregon’s switch to the federal alternative could hit enrollees hard. An estimated 70,000 Oregonians enrolled with paper applications through Cover Oregon, making many of them eligible for federal subsidies. However, the text of ObamaCare doesn’t make subsidies available if insurance is bought via the federal website. So far, the IRS isn’t making the distinction, but a three-judge panel at the D.C. Circuit seems ready to apply the law as written.

The intent of ObamaCare’s drafters was to reward state citizens with federal subsidies if they chose to shoulder the start-up costs associated with running a state-based exchange. Now that Oregon is pulling the plug on its failed website, its citizens may be losing the assistance they need to make ObamaCare affordable.

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