Cost conundrum: Cover Oregon’s problems by the numbers

by Shelby Sebens | Northwest Watchdog

Bruce Goldberg, acting executive director of Cover Oregon, told a legislative committee earlier this week it’s no secret the health exchange website is still not working, months after it was supposed to fully launch.

He could add the nation to that list.

What’s not known is how much will have to be cut to make up for the cost to fix it, whether it will ever be fixed and, as some  lawmakers vying for higher political office have suggested, be dumped and turned over to the federal health exchange system.

“At this point it is premature to make that decision,” Goldberg told lawmakers during the first of two legislative hearings Wednesday of the suggestion that Cover Oregon be dumped.

Cover Oregon Acting Executive Director Bruce Goldberg

He said the state will be in a better position to make that choice in a couple of months. It’s possible, he said, the site could be fully functional by then. Of the 48 “critical problems” facing the website, programmers are down to 13.

The state has so far enrolled more than 65,000 people, 23,000 of which are in private insurance, through paper applications. But some have slipped through the cracks and were unable to enroll.

Officials have been back and forth for months, extending the date when the website likely could be fixed. Many lawmakers are growing impatient.

“I have no confidence that many of the same individuals, agencies and companies that presided over this on-going disaster are in a position to salvage the state website,” state Rep. Jason Conger, wrote in an email to Gov. John Kitzhaber. “Indeed, I don’t believe they should be afforded yet another chance to fail — I have simply lost faith in this whole project.”

Conger, a Republican, has announced he’s running for the U.S. Senate seat held byDemocrat Jeff Merkley. He also sits on the House health care committee, one of two committees that grilled Goldberg on Wednesday over the Cover Oregon “train wreck.” Conger also said he wants a clearer picture of how much it’s costing to fix the problem.

Many other Oregonians are wondering the same. A response to a public records request from Northwest Watchdog shows what some of those costs will be. Some questions asked by Northwest Watchdog could not be answered, but officials say the information is being gathered.

Goldberg said the state can pay for the fixes within the budget by cutting other areas, such as future staffing and advertising. As of Nov. 30, Cover Oregon and the Oregon Health Authority have spent $166 million, including the cost to build the website and grants from the federal government.

Here’s a breakdown of the known and unkonwn costs of the Cover Oregon debacle and the dollars it might take to fix it.

$3.3 million: 400 plus employees hired to process paper applications. About $1 million of that came from Cover Oregon and the rest from the Oregon Health Authority from money saved through the state’s fast track Medicaidenrollment program, Goldberg said.

$228,000: The governor’s office has contracted with First Data GovernmentSolutions to conduct an independent review of the Cover Oregon website to find out what went wrong. Matt Shelby, communications strategist for the state’s chief operating officer, told Northwest Watchdog this is a fixed contract so the cost shouldn’t go up. Some lawmakers questioned the need for this during the legislative hearing, saying it shouldn’t cost the state to figure out what went wrong.

20 percent: Amount of the Cover Oregon budget that will have to be cut if the agency meets its lowest tier of enrollment projections. “We would be looking at all expenses, one of which is advertising,” Cover Oregon spokeswoman Ariane Hold toldNorthwest Watchdog.

Cover Oregon will also try to recoup more than $20 million from Oracle, the IT company that set up the website.

Holm said some of the cost questions cannot be answered yet as officials are still gathering information.

That includes:

• Additional employees, includingoutside expertise brought in to help figure out how to fix the website.
• Hiring a new executive director to replace Rocky King, who resigned last month. “We are in the process of finalizing a contract for the search firm and once final, we can share the cost,” Hold said.
• Compensating Oregonians who fell through the enrollment crack and couldn’t signup by Jan. 1. The state is seeking federal permission to give tax credits to these folks.

The next couple of months will be crucial for Cover Oregon and the lawmakers who have backed the beleaguered website.

Contact Shelby Sebens at [email protected]

Northwest Watchdog is a project of the Franklin Center for Government & Public Integrity