On Thursday, an advisory committee will hear from staff the odds that more than two years and $130 million worth of work by Oracle Corp, the lead information-technology vendor, can be salvaged in time for the next open enrollment period, which begins in November.
Just as important, however, is the price tag for salvaging Oracle's work. That's because far lower than expected enrollment numbers have Cover Oregon quietly grappling with a budget crisis.
"There's an IT decision and a business decision," to be made, says Clyde Hamstreet, the corporate turnaround consultant brought in recently to head Cover Oregon. "We're just trying to figure out what our options are."
Oracle and the state have signed an agreement to part ways, leaving Cover Oregon with two unappealing options.
Moving to the federal health insurance exchange means a loss of control and less capability — think of it as a two-wheel-drive Chevy Nova compared to a Mercedes SUV. But it also offers certainty and a lower cost, estimated by the state's consultant Deloitte as $4 million to $6 million.
Deloitte projected a cost of about $25 million for the first year of work to try and salvage the Oracle work in time to have a functioning, if unfinished, exchange in November, according to a preliminary report issued in February.
But the state has been in negotiations with Deloitte to take on that job, and it's unclear if the consultant's bid would be within the state's budget.
Another option -- going with another state's technology -- has been rejected by the state as too expensive. Deloitte's report had estimated the costs at $17 million to $20 million.
Officials for the troubled Maryland exchange, which recently junked its technology and chose Deloitte to install Connecticut's version, said the IT company's bid translated to a price tag of between $40 million to $50 million. That number is roughly double the estimate Deloitte prepared for Oregon.
Also uncertain is of whether Cover Oregon's exchange can be salvaged in time for November. The Deloitte report estimated there are 2,000 programming bugs, as well as other flaws, in the Cover Oregon system.
Hamstreet said his team is trying to nail down the exchange's available funds. He declined to comment on whether outside funding, say, from the federal government, might be available.
Cover Oregon managers already have been instructed to cut 20 percent from their budgets, and Hamstreet's firm is engaged in a reorganization that could lead to layoffs.
To date, Cover Oregon has signed up more than 63,000 people for private insurance, which generates a per-member per-month fee of $9.38 for the exchange. However, that figure runs behind projections and the lag is only going to get worse.
Cover Oregon's budget for 2015, an estimated $50 million, assumed 23,000 enrollments in small business coverage in 2014. Those figures won't materialize because the exchange's small business website is unfinished and on hold indefinitely.
The Cover Oregon technology work group meets at 10a.m. Thursday at Cover Oregon headquarters in Durham, 6760 SW Upper Boones Ferry Road
The Cover Oregon board will consider the work group's recommendation Friday at 10 a.m., also at its headquarters.
©2014 The Oregonian (Portland, Ore.)
