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Oregon to drop its disastrous Obamacare exchange, join HealthCare.gov

Oregon’s Obamacare exchange is set to drop its still-nonfunctional website and have the federal government run its health care marketplace, the Washington Post reports.

Administration officials from the Centers for Medicare and Medicaid Services reportedly told Cover Oregon that they believe the state lacks the ability to repair the exchange itself.

Cover Oregon received $305 million in federal taxpayer funding, but its website crashed on day one and the state is still unable to support online enrollment. After several months of struggling, officials switched over to paper applications in November. Now, phone lines with questions are so overloaded that some calls won’t connect, Oregon’s KATU reports.

It’s not clear whether Oregonians who have enrolled via paper applications will be required to re-enroll through a federal website for their insurance to continue into 2015.

The exchange is being investigated by the General Accountability Office (GAO) and according to reports, the FBI has investigated whether Cover Oregon officials lied to Obama administration officials during check-ins on the status of the federal early innovation grants.

Despite the technical meltdown, Oregon’s exchange simultaneously gained national notoriety for their costly folk-themed commercials featuring rainbows and sunshine and promising that Oregonians are “free to be healthy.” (RELATED: Oregon Obamacare exchange pulls expensive hipster ads

California Republican Rep. Darrell Issa, whose Oversight Committee has been leading Obamacare investigations over the past six months, called for Oregon to pay the price for the exchange’s implosion in the wake of the announcement.

“Going forward, federal officials should insist that Oregon foot the bill for the state’s transition to the federal exchange,” Issa said Thursday. “Federal taxpayers should not be stuck with the bill twice for this disastrous project. The Administration needs to stop treating taxpayers as a bottomless piggy bank to bail out one botched Obamacare project after another.”

While Oregon is the first state this year to opt to join the federal exchange after encountering technical problems, Maryland’s Obamacare marketplace had also decided to trash its original website and purchase a model of Connecticut’s more successful exchange instead. Both Oregon and Maryland received federal early innovation grants to fund their marketplaces, which the Obama administration expected to be leaders for the rest of the country.

In fact, Cover Oregon was lauded by the liberal media for embodying Obamacare reforms at their best just months before the exchange’s October 1 disaster.

“Oregon may be the White House’s favorite health exchange,” the Washington Post’s Sarah Kliff wrote in May 2013. WaPo’s celebration came after one insurer requested to lower their premium rates in light of less costly insurance from a competitor.

Insurers will be faced with new problems when moving to the federal exchange, however. Portland Business Journal reports that five of 16 insurance carriers offering policies on Cover Oregon have interfaces that don’t work with the federal exchange, HealthCare.gov.

The exchange’s current interim director Clyde Hamstreet (two previous directors have already resigned) said that “it’s up to the insurance carriers what they want to do.”

Officials hope to have a federal exchange up and running by the opening of the next enrollment period November 15.

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