Obamacare Co-Ops Failing by Design
A top official with the Centers for Medicare and Medicaid Services explained today why 11 nonprofit insurance companies created under Obamacare have shuttered their doors, leaving more than 690,000 Americans to purchase new insurance.
During testimony before the House Ways and Means Health Subcommittee, Mandy Cohen, chief operating officer of the Centers for Medicare and Medicaid Services, told lawmakers why a number of co-ops have announced their closures in the last few weeks.
If [consumers are] shopping in open enrollment right now, we wanted to make sure that they knew that the co-ops that remain in the marketplace were financially viable, can make it through the entire year,” Cohen said. “Our first priority was to make sure there wasn’t going to be a mid-year failure next year for any consumers. And that’s how we went about our decision-making. We played it very conservative in that way, which is why I think there’s been so much activity in the last several months.”
Since October 1, seven co-ops in Tennessee, Kentucky, Oregon, Colorado, South Carolina, Utah and Arizona have announced they will not be selling insurance in 2016. Four more in Iowa, Louisiana, Nevada and New York told consumers earlier this year they were shuttering.
“This is costing a lot of money,” Rep. Peter Roskam, R-Ill., said of the co-ops during the hearing. “It seems like at many levels, it’s simply a failure. It’s out of balance. … It just seems like it’s a disaster. Let’s turn the page, call it what it is and move on.”
Obamacare’s open enrollment period began Sunday, and consumers who previously were insured through the 11 failed co-ops were told they would have to buy a new plan from a new company before their coverage ends at the end of the year. The co-ops that closed their doors directed the more than 690,000 affected consumers to federal or state-run exchanges to select new plans.