Fate of ObamaCare co-ops uncertain after half collapse

The fate of a network of alternative “co-op” health plans started under ObamaCare remains uncertain going into 2016, after half of them collapsed amid deep financial problems.

The co-ops are government-backed, nonprofit health insurers propped up with over $2 billion in taxpayer loans. Twelve of the 23 co-ops established under the Affordable Care Act, though, have gone or are expected to go under by the end of the year, leaving customers who used them scrambling for coverage and taxpayer money at risk.

We told them this would fail from the start. But they wouldn’t listen….all they could see what the control they had over our lives.

Kevin Counihan, insurance marketplace CEO at the Centers for Medicare and Medicaid Services, described the co-op failures and other changes as simply “inevitable” in the health care industry.

“Things change,” Counihan told Fox News. “There is a natural ebb and flow to this business. You see this in start-ups in all industries, and it’s also true in health care.”

Fox News

But this answer didn’t satisfy lawmakers worried about the unrest caused by the co-op failures, and the taxpayer money at stake. But as for what comes next, analysts suggest it could take another year before anyone knows whether the remaining co-ops can survive or not.

“This was a fairly risky exercise to begin with,” Ed Haislmaier, senior research fellow in health policy at the Heritage Foundation, told Fox News.

Fox News

According to Haislmaier, it is possible other co-ops fail in the near term, but he doesn’t expect more announcements before next fall – since state regulators already moved against the weakest co-ops before the current enrollment season, giving consumers a chance to pick a new plan.

“State regulators have gone through a process, to review and shut down co-op programs that were too weak to continue for another year,” he said. “… It explains why you saw a big bunch of them announce they were closing in October – because it was the drop dead [date]. If you’re going to pull the plug, October was the time to do it.”

Fox News

The CMS says nine of the closing co-ops will be operating under the federal HealthCare.gov, and the agency plans to help those consumers to “shop and compare” plans.

Yet other states with closing co-ops — like New York, Kentucky and Colorado — all operate on their own state-based exchange, which would likely absorb the co-ops’ ex-customers.

In Colorado, for example, Connect for Health Colorado opened in October of 2013 as the state exchange and will now take the co-op customers. “We have a lot of options for them,” Luke Clarke, spokesman at Connect for Health Colorado, told Fox News, referring to the roughly 80,000 consumers who will need to shop for new insurance after the-co-op flop.

A community organizer doesn’t know squat on how to run a country.

According to CMS, the co-ops were implemented to add more “choice and competition” for consumers. But while ObamaCare supporters blamed Congress for the failures to date, Haislmaier says the co-ops are at fault.

“I would place most of the blame on the management of the companies because they were counting on money that was uncertain to begin with,” Haislmaier said, referring to faulty enrollment estimates. “The companies that counted their chickens before they hatched got into trouble; the ones that did not, didn’t get into trouble.”

Fox News


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