Almost all of Obamacare’s landmark health insurance co-ops are in financial trouble.
The co-ops were invented by the health-care law — they’re private nonprofits that were awarded a total of $2.4 billion in loans from the federal government, in order to establish nonprofit competition to private health insurance companies. Most of the 23 Obamacare co-ops failed to meet their own enrollment and profitability expectations in 2014, according to a report from the Department of Health and Human Services Inspector General — and 21 of 23 totaled up a net loss for the first year of Obamacare’s operation.
That’s to be expected in their first year of operation, according to CMS, but 19 of the 23 nonprofits’ losses exceeded their own projections for the first year. Four co-ops performed so badly that the agency charged with overseeing both the health-care law and the co-ops, the Centers for Medicare and Medicaid Services, put them on enhanced oversight or corrective action plans, and two additional co-ops were given low-enrollment warning notifications. but CMS did not establish any criteria or guidance for the fledgling companies to determine whether a co-op was ultimately sustainable at all, according to the report.
The IG report follows independent figures which found that 22 co-ops had reached net losses by the end of 2014. Thomas Miller, a resident health care fellow at the American Enterprise Institute, and Grace-Marie Turner, president of the Galen Institute, crunched the numbers in June and told The Daily Caller News Foundation that the net losses reached a record $614 million for 2014.
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