Cover Oregon officially calls it quits, state to use federal ObamaCare site

Cover Oregon on Friday became the first casualty of the state-run ObamaCare exchanges, as officials formally gave up the fight to offer residents a state health care portal. Instead, Oregon, which has been hemorrhaging millions of dollars on a barely functioning website that has failed to sign up a single person, is turning to the federal government for an out.

Cover Oregon’s full board approved the recommendations made Thursday by an advisory committee to fold its troubled portal and use the federal for private policies.

The state initially paid $134 million to Oracle Corp. to build its online exchange. Cover Oregon also spent more than $3 million on marketing the site, which included radio, television and YouTube ads, spokeswoman Ariane Holm told last year.

Cover Oregon received a month-long enrollment deadline extension because of multiple technical glitches in its system.

But fixing the existing system, Cover Oregon officials say, would have meant pouring another $78 million into the growing money pit. Switching to the federal system significantly reduces the cost to around $5 million.

“I guess I am still saying ‘I told you so,’” said former Oregon Rep. Patrick Sheehan on Fox News. “There is a culture of cover up that goes all the way up to the governor’s office.”

Sheehan says there were multiple times throughout the year when the state could and should have, in his opinion, opted for less expensive ways to tackle the costs associated with building and sustaining a state exchange.

“I found out there was other software that we could have licensed instead of building our own,” he said.

It is still unclear how the state might be able to recoup its exchange funding -- if at all. Cover Oregon was partially financed by a 2.5 percent premium tax on insurers selling the exchange, Cover Oregon technology chief Alex Petit said Thursday.

Petit says he’ll meet with federal health officials early next week to iron out all of the financial details.

Oregon’s exchange, which was touted by the Obama administration in the beginning as a success story, quickly proved otherwise. It was widely seen as the worst of more than a dozen states that developed their own online health insurance marketplaces.

The Oregon exchange – like the ones in Maryland and Massachusetts -- have been hit hard by technical glitches that have made signing up difficult for consumers.

The federal Government Accountability Office has announced an investigation into Oregon's exchange, including looking at whether the federal government can reclaim grant money given to Cover Oregon if taxpayer funds were mismanaged.

Separately, former Health and Human Services Secretary Kathleen Sebelius asked for an inspector general's investigation into problems with the rollout of the health care law.

An independent investigation ordered by Gov. John Kitzhaber found state managers repeatedly failed to heed reports about technical problems that prevented the exchange from launching. It also found that Oracle did a shoddy job in building the exchange. Four Oregon officials connected to the development of the Cover Oregon portal have resigned.

Kitzhaber has insisted that communications about the portal's troubles never reached him as the planned Oct. 1 launch neared.

So far, about 240,000 Oregonians have enrolled in coverage through Cover Oregon. More than 69,000 of those enrolled in private health plans, while 171,000 enrolled in the Oregon Health Plan, the state's version of Medicaid.

The Associated Press contributed to this report.