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Oregon's broken healthcare exchange to shift to federal network

By Shelby Sebens

PORTLAND, Oregon (Reuters) - Oregon, whose health insurance network has been dogged by technical glitches that have prevented even a single subscriber from enrolling online, will move its state health exchange to the federal system, officials said on Friday.

A state that fully embraced the Affordable Care Act, Oregon endured one of the rockiest rollouts of President Barack Obama's

healthcare law, requiring tens of thousands of applicants to use paper forms since launching on October 1.

Managers of the state exchange, Cover Oregon, determined it would cost about $78 million to fix the beleaguered exchange, well above the projected cost of switching over to the federal system.

On Friday, the Cover Oregon Board of Directors voted unanimously to accept a recommendation by a technology advisory group to shift the private insurance side of the program to the federal exchange. The Medicaid portion will move to the Oregon Health Plan.

"I don't know that anybody sitting in the room was excited about the proposal that's getting put forth, but at least my impression felt like it was the best option that we had in front of us for those constraints," Cover Oregon Board of Directors Chairwoman Liz Baxter said.

For Medicaid consumers, the transition should appear seamless, officials said. But it was unclear how the shift to the federal exchange for private insurance would play out.

"We know what we have. We need to speak with the folks in Washington and find out how we could do that," Cover Oregon spokesman Alex Pettit said.

The transition could mean some Cover Oregon employees lose their jobs, said Clyde Hamstreet, Cover Oregon interim executive director. Cover Oregon has 190 full time and 270 temporary employees.

Officials did not rule out the possibility of one day returning to a state based exchange.

Several Cover Oregon officials, including two past directors of the program, have resigned in recent months amid an independent investigation that found mismanagement of the system and a failure to report problems from the beginning.

Oregon is not alone. Officials in Maryland and Massachusetts also considered shifting their state-run exchanges to the federal network after experiencing technical problems.

Maryland ultimately kept its exchange intact using special technology developed by Connecticut to manage the system, at a cost of about $45 million, Pettit said.

(Editing by Cynthia Johnston and Andre Grenon)

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