Friday, June 3, 2016

ObamaCare continued Co op failures

Rep. Adrian Smith


Tens of thousands of Nebraskans lost their health insurance at the end of 2014 when CoOportunity Health, the Obamacare Consumer Operated and Oriented Plan (co-op) in Nebraska and Iowa, announced it was facing liquidation. On May 26, Ohio’s InHealth Mutual became the latest co-op failure, leaving 22,000 Ohioans suddenly without coverage.
CoOportunity Health was the first of Obamacare’s co-ops to collapse, forcing 120,000 Nebraskans and Iowans to search for new insurance. Many had found their way to CoOportunity Health after their original health care plans were cancelled due to Obamacare’s implementation, only to lose coverage a second time due to the law’s own failures.
Since then, a total of 13 co-ops have collapsed, leaving only 10 of the original 23 still operating. The Centers for Medicare and Medicaid Services (CMS) have placed at least seven of the remaining co-ops on enhanced oversight or corrective action plans.
When they were created, the co-ops received $2 billion in federal startup funds, mostly in the form of loans. After seven co-ops closed down within a month of one another, I wrote in the Wall Street Journal in November 2015, “These loans will likely never be fully repaid, while insurers and consumers will be on the hook for any unpaid claims left behind by failed insurers.”
As more co-ops fall and the Obama administration refuses to acknowledge the program’s insolvency, the likelihood of loan repayments decreases by the day.
InHealth Mutual lost $80 million in taxpayer dollars before shutting down. Health Republic of New York had lost well over $100 million by mid-2015 when regulators announced its closure. In August 2015, the New York Times reported the Kentucky Health Cooperative lost $50 million “as it paid out $1.25 in claims for every dollar it collected in premiums.” Unfortunately, these are only a few examples of the more than $1 billion squandered to date by co-op failures.
With co-ops collapsing and other insurers choosing to pull out of the marketplaces, more than 650 counties, largely in rural areas, are projected to be covered by only one health insurance provider in 2017. This compounds the existing barriers impeding access to affordable health care for rural Americans.
A study by the Robert Wood Johnson Foundation and Urban Institute, as reported by Business Insider at the end of May, examines the increases in Obamacare premiums between the 2015 and 2016 enrollment periods. Premiums in Nebraska rose by 26.2 percent, making it one of 12 states with an increase of more than 20 percent.
To add insult to injury, when a co-op collapses, enrollees are forced to quickly find other coverage despite few choices or go without insurance and face a possible Obamacare tax penalty.
Obamacare was forced upon Americans by the administration under the banner of fairness, but true fairness would be waiving penalties for taxpayers who lost their insurance through no fault of their own. I introduced H.R. 954 to exempt taxpayers from Obamacare’s individual mandate if they lose health coverage because of the failure of the co-ops in their area.
Under my bill, the exemption applies for the remainder of the calendar year for those who lose coverage in the months of January through September, and through the next calendar year for those who lose coverage in October, November, or December. The mid-year closures of CoOportunity Health and InHealth Mutual, as well as recent reports indicating Community Health Options of Maine may be on the brink of collapse, demonstrate the importance of providing time and flexibility for consumers to find new coverage outside regular enrollment periods.
Consumers who made a good faith effort to comply with the law deserve relief from Obamacare penalties. We must put these measures in place before more co-ops shut their doors and leave thousands more Americans with higher health care costs and fewer choices.

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