Obamacare Co-ops Dropping Like Flies
Number of health insurance co-ops closing climbs to 8
Seems like only yesterday we were reporting the fifth state level health insurance co-op closing in Kentucky. Since Thursday, the co-op closure toll has jumped to eight.
Twenty-three tax-payer funded co-ops were created under Obamacare.
Last year, Forbes Opinion Editor Avik Roy testified before Congress saying, “there are fundamental flaws in the way the co-op program was designed.”
With eight co-ops announcing they’ll be closing up shop by year end and more closures looming, Roy’s year-and-a-half-old testimony is particularly haunting:
“Co-ops were introduced as a substitute for the so called “public option” by Senator Kent Conrad. The idea was that co-op plans, shorn of the profit motive, would offer lower premiums than traditional insurers.
Failure of the co-op program could cost taxpayers as much as $2 billion. In addition, failure could expose hundreds of thousands of co-op enrollees to unpaid medical bills.
The argument that co-ops will succeed because they’re non-profit ignores the fact that non-profit insurers are already widespread in the United States.”
By the end of 2014, 21 of the 23 non-profit health insurance co-ops created under the ACA were losing money. Enrollment was well beneath expectations in 13 of the 23 plans. Less than a year later, one third have closed.
The Wall Street Journal attributed the lack of federal funding to state level non-profit co-ops to the hard work of Congressional Republicans who through budget negotiations, were able to whittle the administration’s $10 billion bailout bid down to about $2.4 billion. Slim federal pickings have left co-ops starved for cash and unable to meet the demands of their enrollees.
Last week, Tennessee, Kentucky, Colorado, and most recently Oregon, announced co-op closures.
As Kristina Ribali pointed out at HotAir, Colorado’s co-op was assuring enrollees they had cash aplenty less than 24 hours before state regulators forced Colorado HealthOP to shutdown due financial insecurity. As a result, 80,000 Coloradans will lose their health insurance plans.
Friday, Health Republic Insurance, one of two co-ops in Oregon announced it too will be closing, making it the eighth to do so. Robert King at the Washington Examiner writes:
The co-op said Friday it priced its plans expecting to receive money from the federal government under its risk corridor program. That program was created under Obamacare to pay marketplace insurers for providing coverage for more older, sicker Americans.
Insurers requested more than $2 billion in payments but the government provided only $362 million.
The shortfall for Oregon placed the co-op in a “difficult financial position,” it said.
The effect of that shortfall is being felt now as several other co-ops have announced their closure for the same reason.
The co-op program was created to offer more competition for Obamacare enrollees.
Oregon’s co-op served nearly 15,000 members, and will still give coverage through the end of the year.
Democratic Presidential frontrunner Hillary Clinton said if elected, she would keep Obamacare with few modifications, though there’s much speculation her proposed changes to President Obama’s signature law would cause health care and insurance costs to skyrocket.
If we wait long enough, she might change her mind about that too.
Meanwhile:
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Comments
Yeh, but Bernie will MAKE it all work. Economics be damned.
Apparently more Democratic Socialist tyranny is required. Other people’s money needs to be taxed beyond freedom.
I am afraid Hillary was and is correct: Unless there is a sea-change in the American voter and in the willingness of conservative congress people to fight the elite ruling class, no story like the subject story makes any difference.
Well, wasn’t it supposed to funnel everyone into that single payer? Why make something that worked to then make everyone change again? I think they were too good at making things collapse and that they weren’t prepared for it to be this soon.
No, it’s right on schedule. They’ll blame the GOP for not throwing enough money at it. Next comes the hardship stories, people losing coverage, bankruptcy, deaths. We all know the drill by now.
I don’t think I told you so by Mr. Roy we be good enough right now.
would not we
Yeah, let’s talk about the lack of “funding”, the money the consumer-operated-and-oriented-plan was set up with Obama’s long-time friend and fellow political activist Sara Horowitz in charge.
She set up a massive bureaucracy but couldn’t tell members which doctors were in the network or what the co-pay was. It was hard to get an ID or a claim paid so they asked for more interest-free loans. Yup, loans. Every money given to these co-ops was to be paid back once they started turning a profit, which Obama said would be easy. Hah, fooled again!
Not enough money? Yeesh. My son got stuck with Obamacare and is paying over $300/month for a catastrophic plan with a $5500 deductible. He’s young and healthy, but in the event of some catastropy he’ll has to pay $5500 up front and then 30% of everything that follows before Obamacare pays one nickel. This is a sweet, sweet deal for insurance companies. How the hell does such a system lose money? (Rhetorical Q).
At least you can say Obama has been consistent. Everything he creates fails, everything he says is a lie, and every dream he shares are as real as unicorns. The most amazing part of all of this is that not only do many still like him, but he still has an approval rating above 0.
Well, he did stop the rise of the oceans. OK, they weren’t rising in the first place, but still…
What did Obama says about Obamacare?
If you like your Dr. you can keep your Dr!
If you like your health insurance you can keep your health insurance!
A middle class family will save $2500 a year on health insurance!
And our buddy Jonathan Gruber, the MIT economist who called the the American public “stupid” and that lying was necessary to pass Obamacare!
Is it any wonder that Obamacare health insurance co-ops are dropping like flies??
After spending millions and millions to tell us how good it is the American public hates it!!
52% share an unfavorable opinion of it. Another failed Obama policy…………..