Oregon's deeply troubled state-run Obamacare exchange voted unanimously Friday to give up. It decided to let the federal exchange HealthCare.gov take over enrollment for the state's residents next year.
In doing so, Oregon becomes the first state to get out of the private Obamacare plan enrollment business, and the second to abandon its existing online market because of serious technology problems.
Maryland recently moved to chuck its existing Obamacare technology and use software from Connecticut's own state-run health insurance exchange.
Other states, notably Hawaii and Massachusetts, are under pressure to either adopt new software for their troubled state-run exchanges or throw in the towel and let the federal exchange handle enrollments for residents of those states.
HealthCare,gov was designed to be scalable, meaning that it can adapt to states being added to the platform.
After Friday's vote by the Cover Oregon exchange's board, a spokesman for the federal agency that oversees HealthCare.gov said it "is committed to working closely with states to support their efforts in implementing a Marketplace that works best for their consumers."
"We are working with Oregon to ensure that all Oregonians have access to quality, affordable, health coverage in 2015," said the spokesman, Aaron Albright, of the Centers for Medicare and Medicaid Services.
The decision to move to the federal exchange will cost Oregon between $4 million to $6 million, as opposed to the $78 million that would have been needed to fix the current system, which as of now has been unable to enroll anyone online in one sitting.
Since it was created, Cover Oregon has spent nearly $182 million, and, in return, has gotten what is generally believed to be the worst online Obamacare exchange in the nation. The state is contemplating legal action against Oracle, the exchange's lead vendor.
The vote means that Oregon residents who want to obtain or renew individual Obamacare health insurance plans effective in 2015 will do so, beginning Nov. 15 through the HealthCare.gov portal. HealthCare.gov already handles enrollments for residents of 36 states that are not operating their own exchanges.
People whose low or moderate incomes qualify them for federal subsidies to offset the cost of individual insurance plans can only get those subsidies if they enroll in one of the plans sold on government-run exchanges.
The vote by the Cover Oregon, which was expected, came after the exchange's board heard that officials had considered 10 options for dealing with the problems of the marketplace.
The second preferred option—fixing the website and hiring a new system integrator—still would have left the exchange unable until next year to handle insurance sign-ups from people outside the open-enrollment period if they experience a qualifying life-change event, such as a job loss or marriage. And the cost of that option was too high, officials said.
Despite the tech troubles of the exchange's website, Cover Oregon has enrolled about 70,000 in private Obamacare insurance through workarounds and has enrolled 172,000 others in the state's Medicaid program.
Future Medicaid enrollments in the state will be handled by the Oregon Health Plan, and not by HealthCare.gov.
The decision to transfer private Obamare plan enrollment responsibility to HealthCare.gov is significant in no small way because last fall, the federally run exchange itself experienced a technological meltdown that left it unable to enroll many people after the Oct. 1 launch of Affordable Care Act plan sign-ups.
But a concerted effort to repair HealthCare.gov began bearing fruit in December.
By April 15, which was the last day that most people were able to enroll in Obamacare plans, about 8 million people had signed up for such insurance via HealthCare.gov and the exchanges run by 14 individual states and the District of Columbia.
Open enrollment in Obamacare plans is now closed until Nov. 15. However, people who experience certain life events—including marriage, divorce or job loss—can enroll via the exchanges at any time.
Under the Affordable Care Act, nearly all Americans were required to obtain some form of health insurance coverage by this month or face a tax penalty next year equal to $95 per person, or 1 percent of their taxable income, whichever is higher.