(Oregonian (Portland, OR) Via Acquire Media NewsEdge) July 25--True believers in health care reform, the board of directors atop Cover Oregon made for convenient fall guys when the state insurance exchange imploded last fall -- even though they were set up to have scant influence on the agency they supposedly oversaw.
Now, after taking political heat for the exchange's technological failure, the appointees of Gov. John Kitzhaber are taking on a more significant role, transforming the agency for the future. At a time when critics of the agency say it should go away, it's the bureaucratic equivalent of an existential moment for an agency considered crucial to federal health reforms.
Their options look increasingly limited
Exchanges like Oregon's were the focal point of the 2010 Patient Protection and Affordable Care Act. They are intended to allow easy comparison of plans and premiums for those who buy their own policies, same-day enrollment, and tax credits up front to reduce premiums for people whose incomes qualify.
In April, the board voted to hook up to the federal exchange in November. But supporters of health reform, including Gov. John Kitzhaber, say the exchange's job is not over. The governor wants the state to continue overseeing the design of health plans offered on the exchange and to ensure consumers have access to coverage under health reform.
"Your work," he wrote the board on July 21, "is to ensure Oregonians have access to quality, affordable health care."
So the board has begun planning for what the exchange should be in 2015 and beyond, as well as how it should be run.
The exchange's primary responsibility, of enrolling people into private plans, will shift to the federal exchange in November. A different agency, the Oregon Health Authority, will take over enrolling low-income people into the Medicaid-funded Oregon Health Plan.
Until late last week, key board members, including Chairwoman Liz Baxter, had hoped to resurrect the state's mothballed exchange technology in time for 2016 health coverage. But on Tuesday, saying they need to stay focused on what can be achieved, Baxter and others moved to take that option off the table
They also decided Oregon should not become a full-fledged federal exchange state, thus losing all control as well as revenue from a 2.5 percent fee on insurance premiums, board members said Tuesday's planning session.
Board members didn't much like the other main option: a hybrid called a federal "partnership exchange" that they said still took too much control from the state.
So what's left? The state's planned 2015 partnership with the federal exchange is called a "supported state-based" exchange. But it's supposed to be a temporary fix before setting up a full-fledged state-based exchange. It allows Oregon to keep insurer fees of about 2.5 percent of premiums for itself until the state resurrects its own website.
The federal message was "this is a way for you to lick your wounds and get strong again," said Nora Leibowitz , Cover Oregon's chief policy officer at the board's Tuesday meeting.
Board members still hope money can be found to repair the exchange technology built by Oracle Corp., though they have accepted it won't happen in time for 2016 enrollments. In the meantime, they have asked new executive director Aaron Patnode to explore how much time they can remain in their transitional hybrid status, while they mull other forms of federal partnership.
The board has another problem, however: projected revenues from the lower-than-expected signups. The exchange's funds available for 2015 -- an estimated $10 million -- are scarcely more than the exchange spent last month alone. The situation looks similar to Washington state, where board members have complained next year's funding won't be enough.
"I don't believe a small-population state can afford to run an exchange on its own," Clyde Hamstreet, who ran the exchange until recently, told the board on Tuesday.
Among other things, the board will determine if the exchange's functions should be handled by a state agency such as the Oregon Insurance Division.
The board's new role is more muscular than its members have held in the past.
From the start, the Kitzhaber administration and the governor's appointee to run the agency, Rocky King, intended the stand-alone public corporation running the exchange would be staff-driven and the board's role highly limited. Top Kitzhaber aide Mike Bonetto recommended the board adopt rules that limited its powers to hiring and firing the executive director.
"They structured the board in such a way to not be overly involved in management," recalled Barney Speight, a former Kitzhaber aide who worked on health reform. King "did not want to spend a lot of time managing a board."
Last summer, as exchange staff started to realize the technology project faced serious problems, the board was tasked with taking the heat for the exchange's inability to open up on time, according to a June 2013 email to exchange staff from consultant Matt Lane that braced for a public backlash. He recommended a scaled-back "soft launch" limiting the website to agents only.
"Have Board of Directors 'fall on the sword' and take responsibility for soft launch strategy," he wrote.
The board approved the "soft launch" recommendation in August. Later as the tech problems deepened, Bonetto, who helped craft the board's limited role in the exchange, blamed the board for his failure to pay closer attention to the technological fiasco as it unfolded. In an interview, he said he relied on the Cover Oregon board to make sure progress was adequate, and the board never raised any alarms.
The board was not informed of many of the issues plaguing the exchange technology, according to interviews and public meetings.
Now the board would like to change that.
The volunteer board members' efforts could be "a better use of our time," said Teri Andrews, the board's vice chair at a Tuesday meeting, complaining that the group hasn't been allowed to play any significant decision-making role. "You might as well just send us a memo."
After the meeting, Baxter agreed. "Yes, we're talking about being much more informed and engaged in the decisions that have to be made," the chairwoman said. But "we need to know what the thing is that we have (to oversee) before we know what the board looks like."
The board plans to meet several more times to discuss the exchange's future and decide on a recommendation in August.
-- Nick Budnick
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