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Bill transferring Cover Oregon to state agency headed to Gov. Kate Brown

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SALEM, Oregon — A bill dissolving Oregon's troubled health insurance exchange and folding its functions into a state agency is on its way to Gov. Kate Brown after it was approved in a bipartisan state House vote Friday.

The bill will be the first to reach Brown since she took office last week. She hasn't said whether she'll sign it.

The measure would dissolve the independent corporation that was created to run Cover Oregon, which was supposed to create a website to enroll people in health insurance under President Barack Obama's health care law. Cover Oregon spent $300 million but never launched a working website, embarrassing the state's political leadership.

"When Plan A fails and you don't have a Plan B, you have to create Plan B. And that's what this is," said Rep. Bill Kennemer, an Oregon City Republican who voted against creating the insurance exchange four years ago but supported disbanding it Friday.

The measure was approved in a 42-14 vote. Opponents said they were concerned about the state's ability to handle the transition.

When the Cover Oregon website failed, Oregon opted to use a federal portal, http://www.HealthCare.gov , instead. Not much would change for consumers if Brown signs the measure abolishing Cover Oregon. Consumers would still be able to use the federal website to enroll in insurance, the Oregon Department of Consumer and Business Services would take over the administrative functions now handled by Cover Oregon.

Cover Oregon is overseen by an independent board appointed by the governor and is funded by a fee added to each insurance plan it sells. As part of a state agency, the Legislature would have more control over its spending, hiring and policies.

The state and software giant Oracle Inc., which was hired to build the technology, have engaged in an escalating legal battle pointed fingers at each other for Cover Oregon's failure.

In a court filing, Oracle's lawyers raised concerns with the bill abolishing Cover Oregon, saying the state is "engaged in an effort to change the law midstream."

Lawyers for the state have told a federal judge that the bill would strengthen their argument against Oracle's claim of copyright infringement because the state is generally immune from litigation under the U.S. Constitution, but an autonomous Cover Oregon is not.

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