The Obamacare Co-ops
President Obama promised the co-ops would help lower medical costs by competing with profit-driven private companies.
[2016]: July has been rough for Obamacare’s non-profit co-op health plans. Four closed after running out of money — three in just one week. Just seven of the original 23 co-ops are still standing. Those seven all lost money last year — and may yet go out of business before the calendar turns to 2017.
All that failure has been pricey. Taxpayers are out $1.7 billion in federal loans that these co-ops will never pay back. -Sally Pipes 
With so many elected Democrats still peddling the "keep your plan" fiction at the time, Obamacare's government option provision was deemed politically unviable and abandoned. The co-ops were an expensive consolation prize to its supporters.
Ironically, now that this experiment is collapsing, even more Americans are being betrayed by the false assurance that they'd be able to maintain their preferred plans.
President Obama promised the co-ops would help lower medical costs by competing with profit-driven private companies.
Seven of the co-ops have closed. A recent report by the Department of Health and Human Services Inspector General said the rest of the co-ops are in deep financial trouble and more are expected to close.
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Minuteman Health of Massachusetts and New Hampshire announced it is withdrawing from the Affordable Care Act exchanges in 2018, leaving only four co-ops in operation. The co-op will stop writing business on January 1 and organize a new company, Minuteman Insurance Company, instead...
"Unfortunately, the program has not worked as intended," the company said. "It has been difficult for insurers to predict their risk-adjustment obligations, which has led some to withdraw from the ACA market."
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Evergreen Health Cooperative Inc. of Maryland announced earlier this month that it is withdrawing from the Affordable Care Act exchanges next year, leaving only five co-ops in operation... This action will force 6,000 customers serviced by the co-op to be automatically enrolled in new plans. The co-op was awarded $65.5 million in taxpayer-funded loans in 2012. Of the 23 co-ops originally created under Obamacare, 18 will no longer offer individual plans
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Illinois’ Land of Lincoln Health announced Tuesday it will be closing its doors. The co-op became the 16th of 23 co-ops launched under Obamacare to collapse, following Oregon’s Health Co-Op. Land of Lincoln Health received $160.1 million in loans from the Centers for Medicare and Medicaid Services. More than 54,000 enrolled in coverage from the co-op through March 31.
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Another Obamacare co-op, Connecticut’s HealthyCT, is closing its doors, and at least two most could follow suit as the nonprofit insurers decide whether they will be able to remain on firm financial footing. The nine remaining co-ops of the original 23 co-ops must make payments totaling at least $130 million through Obamacare’s risk adjustment program, which could damage their viability...
HealthyCT is the 14th co-op created under Obamacare to fail since the health care law’s exchanges opened in 2013.
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Federal health officials are seeking to deny medical reimbursements to doctors and hospitals that have served patients insured by failed Obamacare health insurance co-ops, according to a Daily Caller News Foundation investigation.
Instead, the Centers for Medicare and Medicaid Services (CMS) are insisting it, not medical providers, has the first right to any remaining funds as 12 of the 24 co-ops go through the liquidation process. A legal showdown is expected over who pays for the co-op debacle that to date has lost at least $1.4 billion in federal solvency loans. The failures have forced the cancellation of health insurance policies for at least 800,000 customers.
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One of the more than 20 failed or struggling “consumer-oriented” insurers created by Obamacare is suing the U.S. government for as much as $5 billion in payments it claims are owed to itself and other insurers... Health Republic of Oregon is one of the 23 originally created. The government loaned $2.4 billion to them, but 22 lost money in 2014, and 12, including Health Republic, have shuttered since.
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An official with the Centers for Medicare and Medicaid Services told lawmakers last week that eight of the 11 remaining Obamacare co-ops have been selected for “corrective action plans” and “enhanced oversight.” Twenty-three co-ops were created under the president’s health care overhaul, and so far more than half have collapsed and are no longer selling plans in the marketplace.
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The lone health insurance cooperative to make money last year on the Affordable Care Act's public insurance exchanges is now losing millions and cutting off individual enrollment for 2016.
Maine's Community Health Options lost more than $17 million in the first nine months of this year, after making $10.9 million in the same period last year. A spokesman said higher-than-expected medical costs have hurt the cooperative.
These co-ops immediately struggled to build their businesses. A dozen of the 23 created have already folded.
An Associated Press review of financial statements from 10 of the 11 surviving co-ops shows that they lost, on average, more than $21 million in the first nine months of the year.
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Consumers Mutual Insurance of Michigan has announced it will be winding down its operation prior to 2016, making it the twelfth Obamacare co-op to fail this year.
An FAQ on the insurer’s website reads, “[You] will need to purchase health insurance from another company prior to December 15, 2015 in order to have coverage on January 1, 2016.”
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The Kentucky Health Cooperative, a nonprofit, government-subsidized insurance group aimed at offering consumers more choices in health coverage under the Affordable Care Act, will stop offering health plans at the end of this year. Some 51,000 people with health coverage through the program will have to find other coverage for next year when open enrollment for health insurance opens Nov. 1, officials announced Friday.
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Health Republic of New York, the nation’s largest Obamacare co-op, had been ordered shut down by state regulators last month. But to everybody’s surprise, the insurer’s finances are so dismal that they will have to be shut down in two weeks leaving roughly 215,000 customers scrambling to find new, potentially less affordable plans.
According to a Daily Caller report, “the Centers for Medicare and Medicaid Services gave $355 million in low-cost loans to Health Republic, which included an emergency solvency loan of $91 million in September 2014.”
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Arches Health, an Obamacare Co-Op, was put in receivership Tuesday by the Utah Insurance Department. Arches is the 10th Obamacare Co-Op to close its doors this year.
The Co-Op had been scrambling to find money to keep its doors open but, as reported by the Salt Lake Tribune, the Centers for Medicaid and Medicare Services (CMS) demanded the Insurance Department make a decision about the Co-Op’s future by Tuesday. Approximate 35,000 Utahans were insured by Arches via the Obamacare exchange.
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A Nevada health insurance provider that received more than $65 million in taxpayer-funded loans from the federal government announced last week that it is discontinuing operations at the end of the year. The Nevada Health Co-Op will close its doors beginning Jan. 1 because of “challenging market conditions.” The co-op will be the third of the 23 consumer-oriented and operated plans created under Obamacare to shutter.
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When the so-called "public option" single-payer healthcare program was scrapped during the legislative "debate" over ObamaCare in 2009, lawmakers working on the bill created the Consumer Operated and Oriented Plan Program as a compromise. The non-profit co-op program is meant to compete with private, for-profit health insurance plans in the individual and small group markets. The 2010 healthcare law provided $3.4 billion in start-up funding to help get the program off the ground.
Well, the 23 op-ops that were subsequently created as a result of ObamaCare are in serious financial trouble, according to a new report from the Department of Health and Human Services' Office of the Inspector General. The audit found that 21 co-ops were losing money as of the end of 2014 and 13 are not meeting enrollment projections.
The 21 co-ops lost a total of $382,099,933.
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The grim announcements keep coming, picking up pace in recent weeks. About a third, or eight, alternative health insurers created under President Obama’s health care law to spur competition that might have made coverage less expensive for consumers are shutting down. The three largest are among that number. Only 14 of the so-called cooperatives are still standing, some precariously.
The toll of failed co-op insurers, which were intended to challenge dominant companies that wield considerable power to dictate prices, has left about 500,000 customers scrambling to find health insurance for next year. A ninth co-op, which served Iowa and Nebraska, closed in February.
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A South Carolina health insurer has become the ninth insurance cooperative formed nationwide under the Affordable Care Act to fold. Consumers' Choice Health Insurance Co. said Thursday that it will not sell policies in 2016, a decision that will leave 67,000 individuals and business customers looking for new coverage.