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Statesman Journal: The Trials Of Cover Oregon

When it came to innovation in health care, Oregon seemed years ahead of the curve.

Long before “Obamacare” became a household term, Oregon had been considering the health law’s key component — the health insurance exchange — as far back as the early 2000s.

In 2007 and 2009, the Oregon Legislature continued to establish policy to open the doors for state agencies to explore and improve technology for the exchange.

In 2010, Oregon started receiving federal funds to support its efforts to build the exchange and help pave the way and be a role model for other states. The money was a $48.1 million Early Innovator Grant, which later was bolstered with another $11.8 million.

In total, Oregon received more than $300 million from the Obama administration to build the Cover Oregon infrastructure.

But almost one month past its go-live date, the online insurance exchange has yet to enroll a single Oregonian.

“Am I happy about that?” Cover Oregon executive director Rocky King said in a recent interview. “I do not want to give the impression that I’m happy. I don’t want to give the impression that I’m not holding people accountable.

“I don’t want to give the impression that I’m willing to settle.”

Kentucky, the most comparable state running its own exchange in terms of population, received more than $250 million in federal grants and has enrolled more than 26,000 residents.

The website’s key feature that is impeding the rollout is one that tells users whether they qualify for tax subsidies, the Oregon Health Plan or Healthy Kids. For simple scenarios, such as a couple or an individual with clear-cut eligibility determinations, the system works well, King said. But when it comes to trickier family situations, in which household members could qualify for multiple programs — tax subsidies, OHP and Healthy Kids — the infrastructure is not reliable.

King and chief information officer Aaron Karjala say it’s only a matter of time before the problem is fixed.

“The system is there,” King said. “The system is not broken. It’s just not right.”

Fluid expectations, fixed deadline

Oracle is the key information technology contractor behind the state insurance exchange effort. The company has collected $45.9 million from the Oregon Health Authority, which oversaw the system development until this summer, and $43.2 million from Cover Oregon.

It still has $28.5 million on the table in its contract with Cover Oregon. Contractually, Cover Oregon is holding 5 percent of the agreed payment until it is satisfied with Oracle’s work.

Leaders say that the inflexible Oct. 1 deadline, ambitious objectives and changing expectations while the system was being developed all played a role in the delay Oregon is experiencing today.

Oregon Health Authority Chief Information Officer Carolyn Lawson said the bulk of the infrastructure development began in the summer of 2011, as Cover Oregon was establishing its business plan.

At the same time, new rules were emerging from the federal government — Centers for Medicare & Medicaid Services.

“We’d make assumptions and as things got refined, they’d say, ‘we wanted it to function this way,’ ” Lawson said. “We’d pull out that Lego, make some adjustments and put it back in again.”

At the same time, Cover Oregon was building the front end of the system, or how the public experiences the website.

“We had the IT piece going for a while, but it’s like telling somebody to build a car without telling them what the car should look like,” King said. “A lot of people think we got a big head start. It really wasn’t a head start.”

Cover Oregon is also a more complex system than the federal law required and that other states have built, Lawson said.

It includes 11 insurance carriers in the individual market and eight carriers in the small business market, which all have their own interfaces that communicate and exchange data with Cover Oregon. Ten dental carriers are selling plans on the exchange, too.

The website also incorporates publicly funded Oregon Health Plan and Healthy Kids, with the goal that people who qualify for those benefits could enroll without having to navigate additional websites, forms or phone trees.

Oregon’s system also has 1,700 rules written into the “rules engine,” which are meant to help the software understand the diverse complexities of household scenarios. Eligibility for tax credits or state programs is determined based on income and dependents, and a combination of factors such as a pregnancy or mixed families could lead to a wrong eligibility determination.

“We didn’t want to have that happen here in Oregon,” Lawson said. “The 1,700 rules are very, very complex.”

Other systems around the country are using as few as 250 rules, she said.

In another unforeseen circumstance, Cover Oregon took over the system development two months earlier than planned, because the Oregon Health Authority ran out of its grant funding.

King said the transition didn’t slow down the work, but that it was abrupt.

Soon after the hand-off, Cover Oregon’s Karjala said, he became concerned about the technological setbacks and demanded that Oracle provide additional support to fix them.

Currently, a senior vice president and an elite group Oracle calls its “A-Team” are working full-time and some weekends on the website, and Oracle is footing the bill, Karjala said.

“I said it’s time to bring people in to fix this stuff and address these issues,” Karjala said. “And not much later throughout the summer there were conversations with us calling senior vice presidents.”

‘Pacesetter in health care IT’

Third-party quality status reports indicate that the state had been warned that it could miss the Oct. 1 deadline as far back as November 2012.

Maximus, which provided independent quality control assessments, wrote in a report: “With the project deadline less than 1 year away and the lack of a stable and experienced organization, development and delivery teams within OHA as well as the requirements delay within CO, the probability of missing the target date is currently an issue.”

Its recommendations included simplifying the system as well as postponing implementation of some features.

Near the end of this August, OHA submitted a promising closing report detailing its accomplishments under the federal Early Innovator Grant.

It reported under “current build status” that the system was 82 percent complete, although Lawson noted that the report didn’t represent the full picture of the exchange development.

“Through proper leadership and diligent use of Early Innovator Grant funds, the state of Oregon has become a pacesetter in Health Care IT,” the report reads.

But in the months leading up to the Oct. 1 launch date, Cover Oregon’s King attempted to temper Oregonians’ expectations.

“It’s not going to be beautiful implementation,” King told legislators at a joint committee meeting in September.

In August, Cover Oregon announced its plans to roll out the website in stages. For the first two weeks, Oregonians in the individual market would have to seek out a community partner or an agent to shop for a plan, officials said.

But the weekend before Oct. 1, King made the decision to delay online enrollment — with or without trained helpers.

Karjala said tests on the eligibility determination feature were conducted in the months leading up to October, but that it still was under development.

“We had every intention — if possible — to go live using our launch strategy, then do follow-up work for eligibility,” Karjala said.

In the final walk-through, however, King decided to hold off altogether.

Getting it right

Cover Oregon currently is on Plan C, and the next few days will determine whether it will have to resort to its fourth backup plan.

Testing still was inconsistent three weeks after the launch date. King said the trials are run using demographic examples to see whether the software will make an accurate eligibility determination.

Sometimes it will get most of them right.

“And then you make changes and all of a sudden you get two out of 11 right,” he said.

Still, King accepted Oracle’s commitment to deliver an improved system by the end of this month, he said. But he won’t believe it until he sees it.

“We’ll work with them to make sure I have removed every barrier for them to meet that commitment,” King said. “But I’m not willing now to say this is a date.”

Karjala added that beyond the contractual agreement with Cover Oregon, Oracle has a major incentive to succeed.

With only 17 state exchanges set up so far, the remaining states could be Oracle’s future clients.

States that hope to build their own exchanges are contacting Cover Oregon to learn about its process, Karjala said.

But in the theoretical case that the website is still not fully operational come Nov. 1, the plan is to continue pushing Oregonians toward paper applications.

As of Wednesday, Cover Oregon had received 4,260 paper applications, and 2,459 online accounts were created by community partners and agents. The applications and accounts represent about 11,500 Oregonians, spokesman Michael Cox said.

No one has been able to enroll in private insurance through the exchange yet.

Gov. John Kitzhaber’s spokesman, Tim Raphael, wrote in an email that “the governor is concerned about ongoing technical issues with the online exchange, and he is in regular contact with the leadership team at Cover Oregon.”

The Oregon Health Authority rolled out a streamlined process to enroll Medicaid-eligible people already receiving public benefits and tallied 62,000 new members in the first several weeks, shaving off 11 percent of the state’s uninsured population.

Lawson said Cover Oregon’s technological woes don’t change the state’s narrative of being a pioneer in health care.

“I think Oregon is ahead in policy,” she said. “The tech implementation is going rough. That doesn’t mean the policy is bad.”

King is aware that Cover Oregon isn’t looking good right now, but he isn’t letting public pressure change his decision to wait until the state gets it right. He said he doesn’t want to release a shoddy product for the sake of meeting a deadline. or (503) 399-6673



Kentucky, which is just ahead of Oregon in population, has found success with its online insurance exchange. Page 9A


March 2010: President Obama signs Patient Protection and Affordable Care Act, nicknamed “Obamacare”

February 2011: Oregon Health Authority receives $48.1 million in Early Innovator Grant from Centers for Medicare & Medicaid Services

June 2011: Gov. John Kitzhaber signs SB 99, establishing Oregon Health Insurance Exchange

October 2011: Cover Oregon holds first board meeting

February 2012: Oregon Legislature approves Cover Oregon’s business plan

May 2013: Oregon Health Authority hands off tech build oversight to Cover Oregon

August 2013: Cover Oregon announces its plans to roll out website in phases starting Oct. 1

October 2013: Cover Oregon delays online enrollment because of technological problems

By the numbers

Total federal grants


Uninsured population

Total population


$303 million



3.8 million


$253.7 million



4.3 million

Source: Centers for Medicare & Medicaid Services, Kaiser Family Foundation, Kentucky news reports

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