Since May, four more Obamacare health insurance co-ops have collapsed, forcing legislators to take a hard look at the vitality of the government-based health care system.
The House Oversight and Government Reform Subcommittee on Health Care, Benefits and Administrative Rules convened last week to address two core issues: assessing the measures the Centers for Medicare and Medicaid Services (CMS) intends to take to protect consumers and preserve taxpayer dollars; and examining the failed co-op program and others tied to the Patient Protection and Affordable Care Act (PPACA).
Rep. Jim Jordan (R-OH) and the subcommittee chairman began the hearing by emphasizing the mass failure of the co-ops.
“Just yesterday, Illinois’ co-op folded,” Jordan said. “That’s the fourth one since May. That’s 16 now out of 23. That’s after the administration spent $2.4 billion setting up nearly two dozen co-ops.”
In 2010, the ACA launched 23 government-funded co-ops as alternative health plans.
Advocates of Obamacare had counted on the nonprofit co-ops competing successfully with for-profit commercial insurance companies to boost competition and lower health care costs. However, things didn’t unfolded as planned.
The collapse of the co-ops has left over 800,000 insurance consumers without coverage. The demise of the co-ops has been compounded by systemic problems, including call center glitches, website failures, software issues, inadequate processes for determining eligibility and lower-than-expected enrollment numbers.
“Over $1.6 billion in federal loans have gone to the failed co-ops,” Jordan said. “Money that probably will never be recovered -- more closures are expected. My guess is that every single one of these, every single one, all 23 are ultimately going to fail.”
While Kevin Counihan, deputy administrator and director for CMS’ Center for Consumer Information and Insurance Oversight, and Linda Blumberg, senior fellow for the Urban Institute, highlighted the successes of Obamacare during the hearing, Rep. Earl "Buddy" Carter (R-GA), who was also in attendance, told Patient Daily he was “extremely disappointed” that the Obama administration is still supporting the co-ops.
“Even with that kind of record -- with the failure of all of those co-ops -- the administration seems to be intent on continuing and it’s like the old saying goes, ‘When you’re in a hole, stop digging,’” Carter said. “You would think that they would go ahead and just cut their losses and head on home, but they’re not.”
Carter said he believes the Obama administration doesn’t want to admit it was wrong, despite the signals, for political reasons.
“(That’s) foolish because right now, all we’re doing is throwing good money after bad,” he said. “It’s already been proven that the co-ops don’t work.”
Carter said he did not see any willingness to change on the administration’s part.
“It’s obviously not working,” he said. “It’s obvious that they have been a failure and the administration just needs to admit to that and move on.”