With major insurers in some states proposing up to 51 percent Obamacare insurance premium increases, liberal Democrats are scrambling to avoid a political and financial disaster. One proposal is to merge California’s financially troubled “Covered California” exchange with the even more insolvent state exchanges, like “Cover Oregon,” which was forced to shut down last year.
Obamacare provided $4.8 billion in federal funding for 13 states to set up their own independent healthcare exchanges. But after just 17 months of operations, spending has frittered away that money and most exchanges are experiencing serious cash-flow problems. The Covered California exchange is already running an $80 million deficit as of April, and the Cover Oregon was shut down in April 2014 and opted to transition to the federal system after blowing through $248 million in federal cash.
Governor Jerry Brown has an opportunity to demonstrate his national stature by offering to lead the merger of the California and Oregon exchanges. Conceivably, he could then propose rolling-up other financially struggling exchanges, like New York and Connecticut exchanges, which are just beginning preliminary joint-venture talks.
Oregon tried to publicly berate Oracle Corporation, the lead website developer for “Cover Oregon,” for the failure of the state exchange due to technology problems allegedly outside of bureaucrats’ control.
But in a lawsuit filed against “Cover Oregon,” Oracle claimed they are still owed $23 million under their contract. According to the Los Angeles Times, the lawsuit noted that hundreds of thousands of Oregonians were enrolled in health insurance by back-office customer service representatives and health insurance agents using the software built by Oracle and a dozen other contractors. But state officials never terminated the temporary administrative workers and switched over so consumers could enroll on their own online.
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