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ObamaCare’s Co-Op Train Wreck

- November 13, 2015

ObamaCare's Health Co-Ops Are "Collapsing" At A "Rapid Clip." "Health cooperatives are collapsing at such a rapid clip that some co-ops and small insurers are forming a coalition to consider legal action to try to change health-law provisions they blame for their financial distress." (Stephanie Armour, "More Health Co-Ops Face Collapse," The Wall Street Journal, 10/16/15)

16 Of the 23 Original Co-Ops Have Failed. “Sixteen Obamacare co-ops have now failed. Illinois announced that Land of Lincoln Health, a taxpayer funded Obamacare co-op, would close its doors, leaving 49,000 without insurance. The co-op now joins a list of 15 other Obamacare co-ops that have collapsed since Obamacare has been implemented.  Failed co-ops have now cost taxpayers more than $1.7 billion in funds that may never be recovered.” (Toni-Anne Barry , “Illinois Obamacare Co-Op Becomes 16th To Collapse,” Americans For Tax Reform, 7/13/16)

  • Illinois’ Obamacare Co-Op Announced Its Failure. “An Illinois health insurance co-op with 49,000 policyholders in the state has become the latest casualty among a dwindling group of nonprofit alternative insurers set up under the Affordable Care Act. Illinois regulators took steps Tuesday to shut down Land of Lincoln Health, a 3-year-old startup that lost $90 million in 2015 and more than $17 million through May 31.” (Karla K. Johnson, “Illinois Move To Shut Down Failing Obamacare Health Insurance Co-Op,” The Associated Press, 7/12/16)
  • Oregon’s Second Co-Op Which Announced It Was Closing In July 2016 Due To Financial Struggles. “Oregon regulators are moving to take control of a federally funded health insurer, Oregon’s Health CO-OP, saying its finances put the well-being of 20,000 Oregon consumers at risk. The state is placing the nonprofit insurer into receivership and will dissolve it. Current members are encouraged to find other plans by July 31, when the CO-OP’s plans expire.” (Nick Budnick, “Oregon To Take Over Troubled Nonprofit Health Insurer As 20,000 Must Change Plans,” Portland Tribune, 7/8/16)
  • Connecticut’s ObamaCare Co-Op Also Failed In July Of 2016 Due To Financial Instability From A $13.4 Million Federal Bill. “Connecticut's financially ‘unstable’ Obamacare health-insurance co-op was placed under state supervision on Tuesday, as regulators said 40,000 people covered by the company will ultimately have to find new plans for the coming year. HealthyCT is the 14th of 23 original Obamacare co-ops to fail since they began selling health plans on government-run Affordable Care Act insurance exchanges. Several of the other remaining co-ops, at least, are believed to be on shaky financial ground. Until last week, the nonprofit HealthyCT had "adequate capital and sustainable liquidity" — but that fell apart Thursday with a federal requirement that hit HealthyCT with a $13.4 million bill, according to the Connecticut Insurance Department.” (Dan Mangan, “'Financially Unstable' Connecticut Obamacare Co-Op Now Under State Supervision,” CNBC, 07/05/16)
  • Ohio’s ObamaCare Co-Op Failure In May of 2016 Cancelled Policies On Roughly 22,000 People. “Yesterday, the Ohio Department of Insurance announced it was closing InHealth Mutual, one of Obamacare’s Consumer Operated and Oriented Plan (CO-OP) programs, which was created with more than $129 million in taxpayer dollars to provide health insurance. Nearly 22,000 Ohioans now find themselves losing their health plan with a short amount of time to find a new option. And news reports reveal InHealth lost $80 million last year despite being under “enhanced oversight” by the federal government.” (“Another Co-Op Closes Because Of Obamacare Failures, Committee On Ways And Means, 5/27/16)
  • Maine, The Only Co-Op To Make Money In 2014, Announced That It Will Close For 2016. "The lone health insurance cooperative to make money last year on the Affordable Care Act's public insurance exchanges is now losing millions and suspending 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." (Tom Murphy, "Lone Profitable ACA Insurance Co-Op Losing Millions," The Associated Press , 12/10/15)
  • Arizona's ObamaCare Co-Op Was Suspended From Selling Insurance, Leaving A Third Of Arizonians Who Got Insurance Through The Federal Exchange Grasping To Find New Providers. "About a third of the Arizonans who bought health insurance on the federal marketplace for 2015 will have to find a new provider following action by state insurance regulators to suspend the state's nonprofit insurance co-op's ability to sell new policies over concerns it could fail. The suspension of Meritus Health Partners means about 59,000 people will need new insurance unless the order is lifted. More than 50,000 of those people bought their plans through the marketplace." ("Health Insurance Co-Op Order means 59,000 Must Find Coverage," The Associated Press, 11/2/15)
  • Utah Shut Down Its ObamaCare Co-Op, The State's Second Largest Insurer Of Individuals, Forcing 66,000 People To Scramble For New Insurance. "Arches Health Plan, a membership cooperative that was born out of the Affordable Care Act and insures 66,000 Utahns, has been ordered out of the insurance market for 2016. Arches insures more low-income Utahns on the federal exchange, healthcare.gov, than any other company besides SelectHealth. But it also has customers who get their insurance on their jobs and individuals who buy plans through insurance agents or brokers. Those 35,000 people who bought Arches plans via the exchange or from insurance brokers or agents will now have to find new health insurance for 2016. The co-op also has to stop writing new policies for businesses immediately, Utah Insurance Commissioner Todd Kiser said. Arches insures 31,000 people through employer-sponsored plans, a spokeswoman said." (Kristen Moulton, "Utah Shuts Down Arches, the State's Nonprofit Insurance Co-Op," The Salt Lake Tribune, 10/27/15)
  • South Carolina's ObamaCare Co-Op Announced That It Will Shut Down, Leaving 67,000 Individuals And Business Customers To Look For New Coverage Health Coverage. "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." (Tom Murphy and Bruce Smith, "Ninth Cooperative Formed Under Affordable Care Act Closing," The Associated Press, 10/22/15)
  • Iowa And Nebraska's Co-Op "Folded In February" Of 2015. "The first plan to collapse served people in Iowa and Nebraska; it folded in February after being taken over by state insurance regulators." (Amy Goldstein, "Financial Health Shaky At Many ObamaCare Insurance Co-Ops," The Washington Post , 10/10/15)
  • Louisiana's Co-Op Shuttered Its Doors In July, 2015. "In July, Louisiana's co-op revealed it was shutting down." (Amy Goldstein, "Financial Health Shaky At Many ObamaCare Insurance Co-Ops," The Washington Post , 10/10/15)
  • New York's Co-Op, The Largest In The Country, "Toppled" In September. "Then late last month in New York state, the nation's largest co-op toppled, startling insurance industry and health policy analysts who thought it was too big for the government to let fail." (Amy Goldstein, "Financial Health Shaky At Many ObamaCare Insurance Co-Ops," The Washington Post , 10/10/15)
  • Kentucky's Co-Op That Served 51,000 ObamaCare Consumers Announced That It Would Close Its Doors. "The latest announcement came Friday, when the Kentucky Health Cooperative, serving about 51,000 customers, said that it, too, will close Dec. 31 because of poor finances." (Amy Goldstein, "Financial Health Shaky At Many ObamaCare Insurance Co-Ops," The Washington Post , 10/10/15)
  • Tennessee's Co-Op Announced That It Will "Shut Its Doors". "A sixth ObamaCare insurance startup announced it will shut its doors on Wednesday, escalating concerns about the future of a program designed to increase competition in the marketplace. Tennessee's insurance commissioner released a statement saying that its health insurance startup, also called a co-op, will no longer offer health plans in 2016 due to the growing financial burden." (Sarah Ferris, "Sixth ObamaCare Startup Insurer Falls," The Hill, 10/14/15)
  • Nevada's Co-Op, That Was Once Considered A "Top-Tier" Co-Op Folded. "Amid this increased monitoring, one co-op has folded, stranding its members, and four others are preparing to close in late December. They include the Nevada Health Co-Op, which was initially among a top tier that federal officials had regarded as best poised to succeed." (Amy Goldstein, "Financial Health Shaky At Many ObamaCare Insurance Co-Ops," The Washington Post , 10/10/15)
  • Colorado's Largest Co-Op Announced That It Would Close Soon, Forcing Over 80,000 Coloradans To "Find A New Insurer" In 2016. "Colorado's biggest nonprofit health insurer announced its closure Friday, forcing nearly 83,000 Coloradans to find a new insurer for 2016. Colorado HealthOP announced Friday that the state Division of Insurance has de-certified it as an eligible insurance company." (Kristen Wyatt, "Largest Health Insurer On Colorado Exchange Collapses," The Associated Press, 10/16/15)
  • An Oregon Co-Op Covering 15,000 Health Care Consumers And 800 Small Businesses Recently Announced That It Would Cease Operations. "One of two Oregon health insurance co-ops created under President Barack Obama's health care law is shutting down. Republic Insurance announced Friday that it won't sell insurance plans in 2016 and will 'begin an orderly wind down of business. … Health Republic covers 15,000 people in the individual market and 800 small businesses in Oregon. The company says it will pay all claims through the end of the year." ("Oregon Insurance Co-Op Health Republican To Close," The Associated Press , 10/16/15)

Co-Ops Were A "Compromise" To Win Over Single-Payer Advocates Into Supporting ObamaCare

Co-Ops "Were A Compromise" With Single-Payer Advocates To Garner Support For ObamaCare In The Congress. "When the ACA was enacted in 2010, the Consumer Operated and Oriented Plans were a compromise to appease congressional liberals who had wanted a new public insurance program for Americans unable to get health benefits at work." (Amy Goldstein, "Financial Health Shaky At Many ObamaCare Insurance Co-Ops," The Washington Post , 10/10/15)


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