Oracle Corp. Must Keep Hosting Oregon's Medicaid System, Oregon Judge Rules

Oracle Corp. must keep hosting Oregon's Medicaid health insurance system, even after the company's contract with the state expires this weekend, an Oregon judge ordered Wednesday. The ruling is the latest chapter in the costly saga over Oregon's botched Obamacare exchange.

Judge Courtland Geyer of the Marion County Circuit ruled that California-based Oracle should host Medicaid until February 2016, the Associated Press reported. The judge said he was more convinced of Oregon's case than Oracle's, and that the state was likely to win in a court battle.

Medicaid serves more than 1 million Oregonians, or about a quarter of the state's population.

Oregon hired Oracle in 2011 to develop the online portal for Cover Oregon, the place where Oregonians could browse and shop for health insurance plans under the Obama administration's Affordable Care Act. But in October 2013, the site flopped before enrollment ever began, and it never went live.

Cover Oregon officials in April 2014 decided to abandon the $248 million portal and instead transition to the federal system. Yet Oregon continues to use parts of the Oracle-built system to help determine which residents are eligible for Medicaid. Oracle is hosting the system's hardware on its servers, AP noted.

Earlier this month, the tech giant notified Oregon that it would terminate hosting on Saturday and would not renew its contract with the state. Oregon then sued to compel Oracle to maintain the system, arguing that Oracle had promised five months ago to renew its contract. State officials thus didn't go shopping for alternative hosting services, according to the AP.

Oregon officials said dropping the Medicaid system would cause "irreparable harm" to thousands of people who wouldn't be able to enroll or re-enroll in the social health care program. Medicaid coverage only lasts 12 months before it has to be renewed.

"We are pleased we have been granted the extension of time needed to continue using the existing technology services," Oregon Health Authority spokeswoman Susan Wickstrom said in response to Judge Geyer's decision Wednesday, according to a statement. She said the ruling would give Oregon time to implement a new system from Kentucky by next year.

Oracle officials declined to comment to the AP on the judge's order. The company previously told the judge that it never promised to renew the contract, and was thus not legally obligated to maintain its partnership with Oregon.

The duo is already embroiled in a separate legal fight. Oracle sued Oregon last August in federal court, alleging a breach of contract and accusing former Gov. John Kitzhaber of leading a "smear campaign" against the company.

Oracle recently suggested in could launch another legal offensive against the state by suing to block legislation to dissolve Cover Oregon completely, the Oregonian newspaper reported earlier on Wednesday.