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State Senate votes to dissolve Cover Oregon

SALEM — The state Senate voted Thursday to dissolve Cover Oregon and merge the failed insurance exchange into an existing state agency.

Two Republicans joined all 18 Democrats in approving the measure Thursday. It heads next to the House.

The expensive failure of Cover Oregon's website was an embarrassment for former Gov. John Kitzhaber. It prompted dueling lawsuits filed by the state of Oregon and the software giant Oracle, which was the main technology contractor.

The change is largely bureaucratic. Oregon would continue operating an insurance exchange under President Barack Obama's health care law using a federal website. The management would be transferred away from the semi-autonomous corporation that now handles it to the Department of Consumer and Business Services. The latter agency is subject to more legislative control.

"I think of Cover Oregon sometimes as a zombie," said Sen. Alan Bates, D-Medford. "Every time we bury it, another arm comes striking up out of the ground, and I don't think this bill is going to finish that completely, but it's a step in the right direction."

In a court filing, Oracle's lawyers raised concerns with the bill, 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.

Republican Sens. Brian Boquist of Dallas and Jackie Winters of Salem joined all the Democrats in supporting the measure.

"I don't like any of the courses of action, but this is the best one," Boquist said.