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FBI Investigating Oregon Obamacare Exchange

1:15 PM, May 5, 2014 • By MICHAEL WARREN
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The Wall Street Journal reports that the feds are investigating the implementation of Cover Oregon, the state of Oregon's now-defunct health insurance exchange as provided under Obamacare. Here's an excerpt:

The Federal Bureau of Investigation is looking into problems that plagued Oregon's implementation of the Affordable Care Act, after the state was forced to scrap its problematic health insurance exchange that was never fully functional, according to people familiar with the investigation.

The FBI has already interviewed some individuals as part of their inquiry, which was first reported by local station KATU and the Portland Oregonian last week.

Cover Oregon, the health exchange created under the Affordable Care Act, has faced major problems for months, and officials last month agreed to scrap their planned state-run exchange that was meant to connect residents with private insurance options. The state will going forward join roughly three dozen other states and use the federal exchange, which itself suffered multiple setbacks in 2013 but has since mostly recovered.

Read the full story here. What investigators are looking for is whether or not officials misled the state about the exchange's problems. "The key challenge facing any prosecutor is proving criminal intent," the Oregonian explains. "Did state officials paint an inaccurately rosy picture of the struggling health exchange? And if so, did they do so with intent to defraud the federal government? Or were they just unduly optimistic or out of touch with reality?"

The total cost of the exchange, over its 8-month existence, is nearly $130 million. And as the Journal notes, Cover Oregon has been a fiscal and organizational mess from the its beginning. The earliest sign was the state's multi-million-dollar ad campaign designed to promote the exchange, before it had even launched. That campaign consisted of costly music videos that seemed to have little to do with health insurance or Cover Oregon.

Then, on Day One of the Obamacare implementation, Cover Oregon was one of several state exchanges that experienced technical problems. By December, it was clear Oregon's exchange was in the worst shape, even more so than the troubled federal exchange, because it wasn't able to enroll anyone in a private health plan (though Medicaid enrollments were up). Cover Oregon began robocalling residents to inform them that if they had not received confirmation of their enrollment through the exchange, then they should probably look for coverage elsewhere.

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