Oregon Exchange Delay Adds to Scale-Down of Health Law

(Corrects to delete Schuyler Connecticut example in 13th paragraph in story published Aug. 9.)

Oregon, a Democratic-led state that has embraced President Barack Obama’s Affordable Care Act, won’t meet all the requirements for its health-insurance exchange when the online marketplace opens Oct. 1.

For at least two weeks, people using Cover Oregon won’t be able to complete their purchase without help from a certified insurance broker or community group, said Lisa Morawski, an exchange spokeswoman. Consumers in all 50 states were supposed to be able to freely shop for health plans on their own.

“We thought that this was an opportunity for us to open our doors on Oct. 1 with all the functionality, but not overload the system,” Morawski said today by telephone.

Oregon’s step-back suggests that states don’t have enough time to comply with next year’s core implementation of the 2010 health law as Obama envisioned. Even the federal data services hub that is supposed to connect the exchanges may not get final security certification until Sept. 30, the inspector general for the Health and Human Services Department said April 5.

“With all of the delays -- the Supreme Court delay, the election -- states and HHS for that matter simply don’t have enough time to put this together as it should be,” said Dan Schuyler, director of exchange technology at the consulting firm Leavitt Partners in Salt Lake City.

Federal Plan

Oregon is one of 14 states building their own exchanges. The federal government is doing most or all of the work in the remaining 36 states. The U.S. Centers for Medicare and Medicaid Services, which is supervising the building of state exchanges, is aware of Oregon’s plan and isn’t concerned, Brian Cook, an agency spokesman, said in an e-mail.

“There will be a marketplace open in every state on Oct. 1, where families can comparison shop for quality, affordable health coverage,” Cook said. Federally run exchanges will be fully open to consumers on time, he added.

Delays in some provisions of the Affordable Care Act are becoming more commonplace as key deadlines in October and January approach. On July 2, the White House said large employers would get a one-year reprieve until 2015 on a requirement that companies offer health coverage to workers.

“There is no doubt that in implementing the Affordable Care Act, a program with this significance, there are going to be some glitches,” Obama told reporters at a White House news conference today. “There are going to be things where we say, ‘You know what? We should have thought of that earlier’ or ‘This would work a little bit better’ or ‘this needs an adjustment.”

“That was true of Social Security. That was true of Medicare. That was true of the Children’s Health Insurance Program. That was true of the prescription drug program Part D,” he said.

De-Scoped Exchanges

The success of the health-care system overhaul is largely dependent on how many people are willing to buy subsidized health plans through government exchanges, particularly young and healthy consumers. The law’s creation of state-by-state marketplaces had targeted about 25 million of the more than 50 million uninsured Americans for coverage.

States building their own exchanges have steadily “de-scoped” their marketplaces, Schuyler said, “meaning scaling back on specific functionality.”

Examples include Nevada, where the exchange won’t have a chat function initially available on its website when it opens, Schuyler said.

Oregon consumers using the state’s exchange will be able to complete enrollment in health plans without help by the end of October, Morawski said.

Cook wasn’t immediately able to say whether any other state is taking Oregon’s approach and initially limiting full use of an exchange.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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