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The state health insurance exchange's lack of adequate financial controls led to almost $489,000 in "unallowable or unreasonable" payments to vendors and service providers, the state reported in a highly critical audit released Monday. Auditors also identified more than $32 million in "problems" with procedure or documentation in their sampling and review of exchange payments and contracts. The 92-page report, which focused on exchange finances for fiscal years 2012-14, listed a litany of high-dollar irregularities at Connect for Health Colorado. The exchange is the state's health insurance marketplace under the Affordable Care Act. (Draper, 12/8)

A scathing audit of Colorado’s health exchange uncovered more than $32 million in problematic spending of federal tax dollars and possible illegal use of tax money to pay for barred activities such as lobbying and marketing. (Kerwin McCrimmon, 12/8)

In the latest installment of its nasty breakup with Oracle America over the state's health insurance exchange website, Oregon will scrap its beleaguered Medicaid enrollment project and replace it with a system built by Kentucky, state officials told lawmakers Monday. (Budnick, 12/8)

Oregon is planning to use an online Medicaid enrollment system from Kentucky after giving up on its own troubled software. Oregon's Medicaid director, Judy Mohr Peterson, told a state legislative committee about the plan Monday. Kentucky's health insurance exchange, kynect, has been applauded as a success story. Oregon's exchange, called Cover Oregon, became a political embarrassment for Democratic Gov. John Kitzhaber when it failed to launch. (12/8)

President Barack Obama’s home state of Illinois has once again decided not to set up its own health insurance exchange, despite concerns the Supreme Court could rule that subsidies are illegal in the federal exchange. (Pradhan, 12/8)