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11th Non-Profit Obamacare Co-Op Closes

11th Non-Profit Obamacare Co-Op Closes

Arizona latest to close, New York closing earlier than planned

Last we reported, eight non-profit co-ops created by the Affordable Care Act announced they were closing. Two weeks later, that number is now eleven.

State and federal regulators have suspended Arizona’s Meritus Health Partners and Meritus Health Mutual Partners. Like the ten non-profit tax-payer funded co-op closures before, regulators cited financial troubles as the reason for the co-op closure.

The Washington Examiner reported:

State regulators have suspended the company that operates as Meritus Health Partners and Meritus Health Mutual Partners to ability to sell or renew plans to Obamacare customers for 2016. The federal government kicked the co-op out from offering plans on the Obamacare marketplaces.

The Arizona Department of Insurance had issued an order of supervision against the company, requiring that the insurer no longer offer plans after the end of the year.

Meritus did not choose to accept the order of supervision. The company’s CEO said that the order “really caught us by surprise,” according to a report in the Arizona Republic. CEO Tom Zumtobel said that he couldn’t get feedback from state regulators on what they needed to do, according to the Republic’s report.

The reason appears to be linked to financial woes, which have doomed the other 10 co-ops. Meritus received $93 million in federal start-up and solvency loans but has yet to make a profit and has lost more than $78 million since it started, the department said.

The decision on Friday comes two days before open enrollment kicks off for Obamacare. It means that all of Meritus’ customers will need to find a new plan.

More than 50,000 Arizonan’s will lose their health insurance policy as a result.

There remain only twelve non-profit, tax-payer funded Obamacare co-ops from the original 23. So far, tax-payer dollars lost clocks in at around $1.1 billion. You read that correctly, billion, with a B.

New York’s co-op, also on the failure closure list, is in far worse shape than originally reported. Other co-ops will continue offering their plans through the end of the year, but Health Republic of New York is in such dire financial shape, they’re closing a month early.

Consumers will be required to find a new plan for December, and also participate in open enrollment for 2016. reported:

New York has ordered Health Republic Insurance to cease offering insurance Nov. 30 after finding that the company’s financial condition was even worse than previously thought.

The state Department of Financial Services ordered Health Republic of New York Sept. 25 to cease writing new health insurance policies and announced that the co-op will wind down its operations after expiration of its existing policies at the end of the year.

However, a subsequent review of the co-op’s finances by the department and the Centers for Medicare and Medicaid Services has found that its financial condition is “substantially worse than the company previously reported,” the Department of Financial Services said Friday.

“In light of these developments, NYDFS and the NYSOH (New York State of Health) Marketplace have determined that it is in the best interest of consumers to end all Health Republic policies – both individual and small group – on Nov. 30, 2015, so that customers can transition to new coverage after that date,” the department said.

Health Republic has more than 200,000 customers statewide…

…Health Republic received $265 million in federal loans when it started up in 2013 and sold insurance policies for less than what many other insurers offered. But the New York City-based nonprofit lost $77.5 million last year and another $52.7 million during the first half of 2015. It is one of 23 consumer-operated and oriented plans, or co-ops, created nationwide under the Affordable Care Act to increase competition and improve consumer choice on state insurance exchanges.

The administration was warned non-profit co-ops would ultimately be a bust with a hefty price tag, yet they forged ahead anyway.

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, almost half 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.


Follow Kemberlee on Twitter @kemberleekaye


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As I’ve said many times, going back to the Deemocrat’s deeming of a patently illegal “law”…

it won’t work because it can’t work.

So, la.

They need to address cost, availability, and responsibility. Instead, they have inflated the first, ignored the second, and discouraged the last.

Also, the paradox created by simultaneously denying intrinsic value and exploiting redistribution schemes predictably reduces social viability and sponsors corruption. They need to improve their reconciliation process.

It is designed to fail and then the public will clamor for a fix, which will be true nationalized single payer NON care .program , expect the worst. the Republicans need to get out ahead with a push for our own version with interstate competition , tort reform , transparency in costs and individual health spending accts . I fear most employers will start dumping people on these exchanges soon , and the failures will be catastrophic.

    Yes, the Republicans need to get out with a full repeal of the ACA, and then push for the rest (especially interstate competition and transparency). 0bama will veto it all, but Republicans still need to push for it.

    If it all collapses, it’ll be on 0bama’s head for vetoing. But if the GOP doesn’t try, they’re complicit for not doing anything to prevent the collapse.

    Sorry, but I don’t buy the excuse, “We’re not going to introduce anything we think the President will veto.” That’s just a recipe for capitulation, and I personally am fed up with that attitude. Instead, they should be putting him (and the rest of the Democrats) on the spot and forcing his/their hand.