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The Guinea Pig State

Oregon’s quarter-century of failed liberal health care experiments

Feb 24, 2014, Vol. 19, No. 23 • By MARK HEMINGWAY
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On December 20, Cover Oregon—one of 14 state-based Obamacare insurance exchanges—began robocalling all Oregonians who had attempted to get health coverage through the state’s new marketplace. “If you haven’t heard from us by December 23, it is unlikely your application will be processed for January 1 insurance coverage,” said the prerecorded call. “If you want to be sure you have insurance coverage starting January 1, you have other options.” For months, an expensive ad campaign promoting the exchange had blanketed the airwaves with a twee folk song, “Long Live Oregon,” promising coverage for the state’s “loggers .  .  . stay-at-home dads .  .  . and indie rock bands”—among other very Oregon vocations—yet now the exchange was so broken it had managed to sign up only 44 people in its first two months. The state was essentially telling thousands of Oregonians who had lost their health insurance under Obamacare, “Save yourselves!” 

Thomas Fluharty

Thomas Fluharty

One day before the calls started going out, Carolyn Lawson, the chief information officer for Cover Oregon who was responsible for building Cover Oregon’s nonfunctioning website, resigned for “personal reasons.” Following Lawson’s departure, on January 1, Rocky King, the executive director of Cover Oregon, resigned citing “medical reasons.” 

On January 9, KATU, a television station in Portland, asked the state’s Democratic governor, John Kitzhaber, about an email a Republican legislator, Patrick Sheehan, had sent to the governor’s office on December 7. The email raised credible allegations that Lawson had “presented fraudulent testimony in a legislative hearing to further her self-interest .  .  . in pursuit of a consulting job with Oracle,” the software company that built Oregon’s nonfunctioning website. In 2012, Lawson had been the subject of a flattering profile in Oracle’s in-house magazine, Profit. The article detailed Lawson’s ambitious plans to redo the entire online infrastructure for the delivery of state services in Oregon, starting with Cover Oregon’s $305 million website. 

Cover Oregon had also won a $59 million “early innovator” grant from the federal government to help offset the cost of building its website. In order to keep the federal money flowing, Lawson had to demonstrate that various aspects of the website were working as the Obamacare enrollment deadline approached. Now Lawson stands accused of building a nonfunctioning dummy website to make it appear that website construction was progressing. Sheehan has since asked the FBI to pursue fraud charges against Lawson. 

Despite the fact that Kitzhaber’s legislative director had responded to Sheehan’s email saying, “You have raised some serious allegations, and I will get this into the right hands in addition to the governor,” Kitzhaber, when confronted, denied any knowledge of the allegations against Lawson and stormed out of the interview with KATU. Less than a week later, Cover Oregon’s interim head announced he was considering scrapping Oregon’s exchange altogether and letting state residents try their luck on the federal exchange, which has also been beset with problems. 

That Oregon ended up with the most disastrous of all the Obamacare exchanges—an impressive achievement, considering how bad the law’s rollout has been—has stunned America’s growing herd of health care wonks. Twenty-five years ago—long before Massachusetts created the template for Obamacare—Oregon began trying to implement universal health care coverage. The state should know more about its uninsured population and how to reach them than any other. But no one who’s watched developments over that quarter-century should be surprised that, once again, Oregon’s attempt to provide health care coverage to everyone in the state has culminated in a nationally embarrassing failure. 

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