August 25 2014

$200 Million ObamaCare Website Lawsuit

Patrice J. Lee

Oregon’s ObamaCare saga continues with a new legal battle between the state and Oracle, Oregon’s website contractor.

Do you recall Oregon’s multi-million dollar ad campaign to convince young people to buy ObamaCare coverage? Nutty and trippy is the best way to describe an ad that was more like Puff the Magic Dragon on an acid-trip than a recruitment tool for healthcare. As we reported, the ads didn’t work and neither did the state’s website. One of the most promising states for ObamaCare had egg on its face after its enrollment website failed to deliver even one online enrollment.

State officials have regained their senses now that they have wasted over $130 million to create a flop. Last week, the state filed a $200 million suit against its website contractor to recoup the taxpayer money lost by claiming that Oracle failed to deliver a product.

They are one step behind though as Oracle already filed suit against the state for withholding balance payments.

This is turning into a nasty battle of the lawsuits for both taxpayer dollars and public opinion.

The Daily Caller reports:

Oregon attorney general Ellen Rosenblum filed a 126-page lawsuit against Oracle on Friday, seeking over $200 million in damages. The complaint claims that Oracle officials made false statements and broke their contract with the exchange. Democratic Gov. John Kitzhaber, who’s facing Republican challenger Dennis Richardson for reelection in November, has publicly urged the state to sue Oracle since May.

Oregon had hoped to launch one of the best Obamacare exchanges in the country and received millions in “early innovator” grants from the Obama administration. But the exchange website never enrolled a single customer — all of Oregon’s Obamacare sign-ups used paper applications, after the exchange hired hundreds of extra employees when they realized the site wouldn’t be fixed in time.

But Oracle beat Oregon to the lawsuit. The technology company filed suit against the state exchange several weeks ago. Oracle claims that the state had put forth “constant public slander” against the company, blaming it for the exchange’s failure. Meanwhile, officials continued to seek Oracle’s help privately. Oracle’s suit alleges that they’re still owed $23 million by Cover Oregon under its contract.

“The lawsuit filed today against Oracle by the Attorney General of Oregon is a desperate attempt to deflect blame from Cover Oregon and the Governor for their failures to manage a complex IT project,” Oracle said in a statement to Business Insider. “The complaint is a fictional account of the Oregon Healthcare Project. Oracle is confident that the truth — and Oracle — will prevail in this action and the one filed by Oracle against Cover Oregon two weeks ago in federal court.”

These suits promise to be a public mudslinging and name-calling contest as no one wants to take blame for what happened to the state's website. 

At the end of the day, those who suffer most are American taxpayers whose hard-earned dollars have disappeared down a black hole of wasted government dollars on a failed experiment.

Where is the accountability? Even if Oregon wins its lawsuit, does it have plans to return the lost dollars to the federal government and will Washington give those dollars back to us? I'm not waiting by my mailbox for a check.

This does set an example of how government's inefficiency, lack of coordination, and ineffectiveness hamper the development of new projects and ideas. The government acts upon imperfect information and is too bureaucratic and political to adapt quickly or vest decision making in the best hands. In the private sector, we can course correct miles before we hit an iceberg. With government, the ship must be sinking before anyone acknowledges there's a problem.

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