Oregon, Oracle settlement ends fight over failed state exchange

Gavel

It appears as though the saga of Oregon’s failed health insurance exchange has at last come to a close.

The state reached a $100 million settlement with software company Oracle, which was in charge of the “Cover Oregon” exchange website, OPB.org reports.

Cover Oregon shut down in April 2014 after it was plagued by persistent technical problems that prevented consumers from enrolling in health plans. In doing so, Oregon become the first state to completely switch from its own exchange to the Healthcare.gov platform.

The demise of Cover Oregon--which cost the state $240 million to build--set off a flurry of litigation, with Oregon originally seeking $6 billion in damages after accusing Oracle executives of fraud, according to the article. At one point there were six lawsuits between the parties, reporter Kristian Foden-Vencil said in an interview. The FBI even opened a preliminary investigation into the exchange’s failure.

As part of the settlement, Oracle will pay $25 million for the cost of litigating the case and dish out $10 million to Oregon schools, Foden-Vencil added. Oregon will also get a six-year license agreement for Oracle’s products and services--allowing the company to continue running and modernizing the state’s software systems--and Oracle will provide $60 million worth of customer support services to the state.

The settlement “closes a damaging chapter of public finger-pointing and failure,” Oregon Gov. Kate Brown said, according to the article.

Oregon’s was not the only state exchange to run into trouble during the early years of the Affordable Care Act. Several states struggled with high costs and lower-than-expected enrollment, leading state-based exchanges like the one in Hawaii to close up shop.  

Some lawmakers have questioned whether it was appropriate for states to switch to the federal Healthcare.gov platform after spending federal funds to set up their own exchanges. The Centers for Medicare & Medicaid Services, though, says it is making every effort to ensure taxpayer money is spent properly.

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