Attention shifts to troubled Obamacare state-based exchanges

As the federal Obamacare website and insurance exchange find their sea legs after a troubled debut last October, the political attention has shifted to states that opted to set up their own exchanges rather than participating in the federal program.

And in some cases, the state of affairs isn't pretty.

In Nevada, officials with the state's health insurance exchange voted on Tuesday to cede control of its online enrollment program to the federal government. The overall health insurance exchange will continue to operate as a state-based marketplace, officials noted, even though the enrollment process has now been re-routed through the federal system.

"The Board's unanimous decision ultimately reflects the Exchange's foremost concern: ensuring that Nevadans receive unfettered access to health insurance coverage," Steve Fisher, the interim executive director of Nevada's state exchange, said in a statement announcing the change, according to Reuters. He added that ending the contract with Xerox, which had been developing Nevada's enrollment system, offered the "highest probability of success for the 2015 plan year."

The state will continue to administer the Navigator program, which helps guide consumers through the often-complicated enrollment process. And Xerox will continue to assist customers who already enrolled for coverage in 2014 via their system by maintaining their call center and customer service operations through November.

Officials said the federal government would incur all costs associated with the transition from Xerox to HealthCare.gov. And in accordance with the cost-sharing arrangement under Obamacare's Medicaid expansion, the state would pick up 10 percent of the bill associated with transferring Medicaid customers to the federal website, while the federal government would cover the remainder.

Meanwhile, in Oregon, the whole system -- the enrollment process and the actual insurance exchange -- was turned over to the feds in April after officials concluded its problems would be too time-consuming and costly to fix.

Now, a federal grand jury is trying to determine what went wrong. On Tuesday, according to the Associated Press, the U.S. attorney's office in Oregon issued subpoenas seeking information about the state's exchange, dubbed Cover Oregon, and Oracle Corp., the contractor that received $134 million in federal money to build it.

The subpoenas are after communication between several state officials who resigned in the as the scale of the state's exchange problems became apparent, including Bruce Goldberg, the former chief of the Oregon Health Authority, Carolyn Lawson, the chief information officer with the health authority, and Rocky King, the executive director of the state exchange.

Both Cover Oregon and the Oregon Health Authority, which was involved in the early stages of setting up the website, vowed to heed the subpoenas.

"We will work collaboratively with the U.S. attorney's office to provide any and all information we have and make any and all staff available to assist," the agencies said in a joint statement.

Not a single customer in Oregon has been able to enroll for insurance through the online process due to the website's problems. Customers were instead forced to enroll through a combination online-and-paper process that was considerably more time consuming.

Even with the hurdles, though, roughly 280,000 Oregonians managed to enroll in the state's exchange during the initial six month open enrollment period, including 81,000 in private health plans and about 199,000 in Oregon's version of Medicaid.

Oregon was the first -- and thus far the only -- state to effectively throw up its hands and turn the job over to the federal government. Maryland's website and exchange were similarly dysfunctional, but officials there decided to adopt the system used successfully in nearby Connecticut rather than participating in the federal system.

The shifting politics behind Obamacare come at a pivotal moment for the law's administrators: Health and Human Services Secretary Kathleen Sebelius is preparing to step down, and her would-be successor, Sylvia Mathews Burwell, is awaiting final Senate confirmation after a pair of surprisingly sedate confirmation hearings.