Oregon’s health insurance exchange, plagued by computer flaws after federal taxpayers spent $303 million to build it, may be closed and the state’s customers shifted to the U.S. Obamacare marketplace.

Directors for the exchange, Cover Oregon, are scheduled to meet Friday to consider a recommendation that the state join the federal exchange, Healthcare.gov. Cover Oregon’s website never recovered from its technology woes, forcing thousands of state residents to apply for health plans using paper applications.

David C. Smith, a broker at Raleigh-Durham, N.C.-based Ebenconcepts, notes the irony that six months after Healthcare.gov's troubled rollout, it's a viable solution for the state-run exchange that had the most problems. "It’s ironic that the feds are more reliable than a state exchange, huh?" he says.

See related: Oregon brokers get 31 extra days to enroll consumers

Once viewed as a trailblazer for the Affordable Care Act known as Obamacare, Oregon was one of the first states awarded U.S. grants to build an insurance exchange. Cover Oregon’s failure has spurred blame-trading between the state government and the project’s main contractor, Oracle Corp., the biggest maker of database software, and imperils the re-election of Governor John Kitzhaber, a Democrat.

“At some point you just have to say it’s time to swallow the pill and figure out: what do we do to move on and improve the situation,” Dawn Bonder, the chief executive officer of Health Republic Insurance, a startup selling plans on Cover Oregon, said in a phone interview. “Looking at all the options and the available funds and the timeline, there doesn’t seem to be a lot of paths to go down at this point in time. It’s sad.”

An advisory panel to the Oregon exchange yesterday recommended the state abandon plans to fix its website or buy technology from another state with a functional marketplace, such as Connecticut. Joining the federal exchange will cost $4 million to $6 million, the panel said in a report, while fixing Cover Oregon’s site may cost $78 million.

Maryland’s exchange

Maryland, whose Health Benefit Exchange also suffered catastrophic computer errors, wants to spend about $45 million to purchase Connecticut’s technology, built by Deloitte LLP.

The U.S. Centers for Medicare and Medicaid Services, which operates the federal exchange, “is committed to working closely with states to support their efforts in implementing a marketplace that works best for their consumers,” Aaron Albright, a spokesman for the agency, said yesterday in an e-mail. “We are working with Oregon to ensure that all Oregonians have access to quality, affordable health coverage in 2015.”

More than 8 million people signed up for private health plans across the U.S. during the initial enrollment season that ended last month. In Oregon, 45,119 customers enrolled as of April 10, Cover Oregon’s board reported.

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