The Ruins: Two More Obamacare Co-Ops Collapse, Only One-Third Remain (For Now)

Matt Vespa
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Posted: Jul 13, 2016 1:35 PM
The Ruins: Two More Obamacare Co-Ops Collapse, Only One-Third Remain (For Now)

Editor's Note: The original post was written in a way that made it look like Obamacare co-ops and exchanges were the same thing. They're not. We deeply apologize for the error. The post has been updated to reflect the changes. 

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President Obama wants Congress to revisit the public option, which was a provision in the Affordable Care Act before it was nixed due to legislative concerns. Democrats were worried about having enough votes to pass the procedural hurdles, with the public option casting doubt as to whether 60 votes could be mustered in the Senate. In the House, the moderate-to-conservative Blue Dog Democratic coalition, which has since been much diminished, had problems with the legislation as well.

Of course, in the present, premiums are set to increase, even for the low-cost plans, some health care providers are leaving the Obamacare markets, and the last of the co-ops are on the verge of total destruction. Well, two more were recently lost. Out of the 23 co-ops that were established, only eight remain. Ali Meyer of The Washington Free Beacon reported on a system in ruins:

Only a third of Obamacare co-ops are still in operation after two more co-ops announced they were closing their doors in the past week.

Connecticut’s co-op, HealthyCT, was placed under an immediate order of supervision on July 5 after being forced to pay $13.4 million for the Affordable Care Act’s risk adjustment program.

The Centers for Medicare and Medicaid Services initially awarded HealthyCT $75.8 million in June 2012, then awarded it $3.8 million in November 2013 and $48.4 million in September 2014.

“It became evident that this risk adjustment mandate would put the company under significant financial strain,” said Katharine Wade, Connecticut’s insurance manager. “This order of supervision provides for an orderly run-off of the company’s claim payment under close regulatory oversight.”

Three days later, the Oregon Department of Consumer and Business Services announced it would place Oregon’s Health Co-Op in receivership and liquidate the company’s assets. The co-op lost $18.4 million in 2015 due to medical claims and individual policies and owes $900,000 to pay for Obamacare’s risk adjustment program. The co-op was awarded a total of $56.7 million from the Centers for Medicare and Medicaid Services.

To pour more salt in the wound (though it’s more of a painful reminder), the failure of the co-ops has left taxpayers with quite the bill. So, it’s a total nightmare, but let’s consider building on this socioeconomic wreck of a health care law because it’s a success, or something. Oh, and as for the remaining eight co-ops left–they're expected to collapse this year.