Oregon makes second try at own health insurance marketplace. How is this time different?

More than a decade after a botched rollout earned Oregon a reputation for having one of the worst state-run health insurance marketplaces in the nation, the state is poised to launch its own system once again. 

The ExploreHealthOR.gov marketplace will officially launch Nov. 1 for open enrollment under the purview of the Oregon Health Authority, serving the nearly 120,000 Oregonians who obtain their health insurance through the private marketplace rather than an employer. State lawmakers in 2023 voted to create the state-based marketplace, a development that will end Oregon’s reliance on a federally-operated website.

The result is a more than $90 million agreement with Vimo, Inc., a software and technology operations vendor that has launched state-run health insurance marketplaces in at least eight other states. That’s cheaper than the more than $200 million the state paid the multinational tech company Oracle using state and federal funds to launch Cover Oregon in 2013. The system was plagued with complaints over rising costs, software errors and an unusable interface for enrollees and massive backlogs, and officials scrapped the effort the next year.

Amy Coven, a spokesperson for the Oregon Health Authority, told the Capital Chronicle that the choice of an experienced vendor was intentional. She said the Cover Oregon rollout came at a time when many states were attempting to implement their own marketplaces “from the ground up.” 

“We’re getting the benefit of all the enhancements that they’ve built on over the years,” she said. “We’ve got a good network of partner states that have a lot of experience working with the vendor and the system.”

The new marketplace comes at a time of financial strain for insurance providers and people who benefitted from COVID-era healthcare subsidies. People who make more than 400% of the federal poverty level, or $63,840 for an individual’s annual income and $132,000 for a household of four people, no longer qualify for health care tax credits which Congress passed in 2021 to address the fallout of the COVID-19 pandemic. 

Providence and PacificSource, two insurers in the Oregon marketplace, will no longer offer plans in 2027, citing an increasingly complex regulatory environment and high operating costs. 

“We’re able to help automatically renew people into similar plans so that if they don’t take action they’ll still be covered for the new year,” Coven said. “Whereas if they’re enrolled directly, once an insurance company leaves, they kind of have to wade through all the options on their own.”

Coven added that having a state-based marketplace will allow for state health officials to more easily route people to state-run programs such as Healthier Oregon or Oregon Health Plan Bridge as well as better track who is accessing coverage. A July analysis from the nonprofit research group Kaiser Family Foundation also found that states with state-based marketplaces generally saw smaller declines in enrollment following the wake of the COVID-19-related Affordable Care Act subsidies expiring.

Lawmakers could take up cost-saving measures

Oregon’s Democratic lawmakers have already signaled an appetite for working to lower health care costs in the wake of double-digit premium increases for 2027. Their proposals may have to compete with advocates pushing Oregon away from private insurance to a universal health care system, a significant move that lawmakers would likely refer to the ballot in 2028 for voters’ approval.

For private insurance on the state’s marketplace, the average plan in 2027 will cost a 40-year-old in Portland seeking a middle-tier insurance policy anywhere from $599 to $734 a month, up from an average $567 for similar plans in the current year. For small group plans, the cost per person for such an individual ranges from $509 to $754, according to state estimates.

Other states, meanwhile, have begun to implement programs to fund their own subsidies for healthcare, such as California, Colorado and New Mexico. Oregon has not adopted that model yet, though it does have a “reinsurance” program that allows the state to help insurers pay for particularly expensive medical claims. The program is budgeting an additional $15 million in order to offset rising insurance costs next year.

Coven said that it will be up to the Oregon Legislature to decide what programs to support in the wake of federal cuts to health care subsidies. She encouraged Oregonians to take advantage of insurance agents and assistants the Explore Health platform offers for help deciding between plans and navigating the system. 

“Once our own system is fully up and running and everything — if we’re directed by Legislature  — then we can implement some state-run programs that could potentially help mitigate some of those losses,” she said.