Official urges state to adopt federal Obamacare site, rather than fix one Oracle built

Oracle and Oregon are at loggerheads over the health insurance exchange Cover Oregon

Oregon's CIO has recommended state officials adopt the federal government's Healthcare.gov insurance exchange in time to meet a Nov. 15 open enrollment deadline, rather than attempt to fix the troubled site it built along with Oracle.

Cover Oregon, as the site is known, went live on Oct. 1 and immediately experienced serious technical problems that have yet to be fully resolved. The fallout has caused political finger-pointing, the departure of key officials and the destruction of the relationship between Oregon and Oracle.

The effort was "an ambitious vision" on the part of Oregon, but after careful study over the past couple of months by a working group, the most prudent move would be to use the federal exchange, state CIO Alex Pettit said during a meeting Thursday, which was webcast.

The parts of Cover Oregon that are working satisfactorily would be kept alive, while officials figure out a long-term plan for integrating them with the federal site, Pettit said.

One potential stumbling block is the fact that a number of insurance companies registered with Cover Oregon haven't built interfaces that work with the federal site, and would have to make those investments by the deadline.

Oregon is withholding US$25.6 million in payments from Oracle out of about $70 million the vendor says it is owed for work it performed, and also reserving the right to sue. Oregon officials decided to act as their own systems integrator on the Cover Oregon project, instead hiring Oracle consultants on a time-and-materials basis.

Oregon officials have tried to deflect blame away from themselves for the site's problems, Oracle co-president Safra Catz said in a letter to Cover Oregon's board that surfaced last week. Governor John Kitzhaber commissioned an independent report that found fault with both sides, however.

Oracle responded to Pettit's recommendation on Thursday in an emailed statement that took a conciliatory tone.

"Oracle looks forward to providing any assistance the State needs in moving parts of Oregon's health care exchange to the Federal system if it ultimately decides to do so," said spokeswoman Deborah Hellinger. "Oracle will continue to support the State in providing long term solutions for Oregonians, and to assist with its ongoing health care modernization efforts."

Oregon officials hired Deloitte to help evaluate the state's options for Cover Oregon going forward, and in a report that surfaced earlier this year the consulting firm said moving to the federal exchange would take five to eight months and only $4 million to $6 million, compared to well over a year and tens of millions for other options.

Cover Oregon's board will make a decision on Pettit's recommendation on Friday.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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Chris Kanaracus

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