Dec 18, 2015

VIDEO: When Washington Manages Health Care

Post by Freedom Partners

Arlington, VA — Freedom Partners released a new video, “When Washington Manages Health Care,” which explains the origin of the Obamacare CO-OPs, why they failed, and what can be done to prevent similar government intervention in American health care moving forward.

“The CO-OP business model is to offer artificially under-priced plans guaranteed by federal bailouts — our tax dollars,” says Freedom Partners Senior Policy Advisor Nathan Nascimento in the video. “Despite early warnings that the CO-OPs would become insolvent, the Obama administration permitted them to survive through accounting gimmicks like counting taxpayer-funded loans as assets.”

“So far, the failed CO-OPs have wasted more than $1.2 billion in taxpayer dollars,” he continues. “And if other CO-OPs fail — as the Obama administration admits will happen — the losses will only increase. This is what happens when Washington manages our health care.”

Under the Affordable Care Act, the federal government originally created 24 CO-OPs using $2.4 billion in taxpayer-backed federal loans. As of today, 13 of those CO-OPs have failed and most of the remaining CO-OPs are on the path to insolvency. As a result, more than 750,00 Americans have been kicked off of their plans.

Well Over $1 Billion Taxpayer Dollars Have Been Wasted On The Failed CO-OPs

Obamacare CO-OPs

CO-OPs Were Supposedly A “Key Mechanism” Of The Affordable Care Act

The Consumer Operated and Oriented Plan (CO-OP) Programs Are One Of The Affordable Care Act’s “Key Mechanisms.” “…the health care law also established a Consumer Operated and Oriented Plan (CO-OP) program to increase competition among plans and improve consumer choice. The federal government awarded nearly $2 billion in loans to help create 24 new CO-OPs in 24 states.” (Julia James, “The CO-OP Health Insurance Program.” Health Affairs, 1/23/14)

The Affordable Care Act Awarded Billions Of Dollars To The CO-OPs. “The ACA authorized $6 billion in CO-OP funding…As of December 16, 2014, and under guidance from the 15-person CO-OP Advisory Board, HHS had made $2.4 billion in awards, including approximately $300 million in supplemental awards during the latter half of 2014.” (Scott E. Harrington, “The Financial Condition and Performance of CO-OP Plans,” Robert Wood Johnson Foundation, 2/15)

More CO-OPs Are Likely To Fail, Says Obama Administration

CMS Warn CO-OPS: Take “Corrective Action.” “The Centers for Medicare and Medicaid Services (CMS), which oversees the health-care law, recently sent warning letters to 11 of the ‘co-ops,’ as they’re known. The agency placed them on ‘enhanced oversight’ or required them to produce a plan of “corrective action,” or both, according to federal figures not previously made public. Several have been notified in the past two weeks.” (Amy Goldstein, “Financial health shaky at many Obamacare insurance co-ops,” The Washington Post, 10/10/15)

HHS Official: “Cannot Rule Out” That More CO-OPs Will Have Solvency Issues. “‘If a co-op has solvency issues, and we cannot rule out that others may this year, we will work with the states so that consumers have affordable options on the marketplace,’ said Department of Health and Hhuman Services spokesman Aaron Albright. ‘As a startup business, we recognize not all will succeed.’” (Richard Pollock, “Feds Admit More Obamacare Co-Op Flops Ahead,” The Daily Caller, 9/28/15)

Experts And Government Officials Alike Saw This Coming

July HHS OIG Report: “Most Of The 23 CO-OPs We Reviewed Had Not Met Their Initial Program Enrollment And Profitability Projections As Of December 31, 2014.” “Specifically, member enrollment for 13 of the 23 CO-OPs that provided health insurance in 2014 was considerably lower than the CO-OPs’ initial annual projections, and 21 of the 23 CO-OPs had incurred net losses as of December 31, 2014…The low enrollments and net losses might limit the ability of some CO-OPs to repay startup and solvency loans and to remain viable and sustainable.” (Office of the Inspector General, “Actual Enrollment And Profitability Was Lower Than Projections Made By The Consumer Operated And Oriented Plans And Might Affect Their Ability To Repay Loans Provided Under The Affordable Care Act,” Department of Health and Human Services, 7/15)

National Alliance of State Health CO-OPs CEO: CO-OPs Were Doomed From “Inception.” “‘From practically their inception, health insurance CO-OPs have been hamstrung by both the structure of the program and the way in which the Affordable Care Act was implemented. Though it has become clear that initial capitalization levels for most CO-OPs were insufficient for the short term, regulatory obstacles have continued to make it virtually impossible for these CO-OPs to raise additional third party capital to support growth.’” (Kelly Crowe, Nashco Statement After Announcement That Federal And State Regulators Will Wind Down Health Republic Insurance Of New York, NASHCO, 9/25/15)

LA Insurance Commissioner: CO-OPs Were A “Near Impossible Task.” “‘I think the challenge of rolling out a new health insurer at the same time as the roll out of the Affordable Care Act was a near impossible task,’ Donelon said. ‘It’s playing out that way in 22 of the 23 states,’ he said, noting that insurance industry ratings experts found that last year all but one of the co-ops suffered large net losses. (Richard Pollock, “Feds Admit More Obamacare Co-Op Flops Ahead,” The Daily Caller, 9/28/15)

Now, Obama Administration Leaping To Bail Out Insurers On Backs Of Taxpayers

On The Same Day As United’s Announcement, The Main Health Insurance Lobbying Group Called On The Federal Government To Bail Them Out. “America’s Health Insurance Plans, the main industry lobbying group, on Thursday called on the federal government to bailout insurers for losses incurred through participating in Obamacare.” (Philip Klein, “Insurance Lobby Pushing For Government Bailout For Obamacare Losses,” Washington Examiner, 11/19/15)

The Department Of Health And Human Services Has Said It Is The Government’s “Obligation” To Bail Out Private Insurers For Their Losses. “The Department of Health and Human Services attempted to reassure private insurers on Thursday that they’ll be able to recover losses from participating in Obamacare by claiming it was an ‘obligation’ of the U.S. government to bail them out.” (Philip Klein, “HHS: Bailing Out Obamacare Insurers An ‘Obligation’ Of The Federal Government,” Washington Examiner, 11/20/15)

CMS Issued Guidance That HHS Would Use Money Collected From Insurers In 2015, And Possibly 2016, To Make Up The 2014 Shortfall. “In an effort to reassure the industry, CMS, the HHS agency Tavenner previously led, issued guidance reiterating that HHS would use money collected from insurers in 2015 and possibly 2016 to make up the $2.5 billion shortfall that exists in 2014.” (Philip Klein, “HHS: Bailing Out Obamacare Insurers An ‘Obligation’ Of The Federal Government,” Washington Examiner, 11/20/15)

HHS Also Said It Would “Explore Other Sources Of Funding For Risk Corridors Payments.” “HHS said it, would ‘explore other sources of funding for risk corridors payments, subject to the availability of appropriations. This includes working with Congress on the necessary funding for outstanding risk corridors payments.’” (Philip Klein, “HHS: Bailing Out Obamacare Insurers An ‘Obligation’ Of The Federal Government,” Washington Examiner, 11/20/15)

“This Is Where The Intimate Network Of The Obamacare Insiders Comes In”

“This Is Where The Intimate Network Of The Obamacare Insiders Comes In.” “CMS — which issued the pledge to fully bail out United Healthcare and its cohorts — is run by acting administrator Andy Slavitt. Slavitt is a former executive at United Healthcare (while he held that position he contributed to Obama’s 2008 election).” (Timothy P. Carney, “As exchanges falter, team Obamacare fights for an insurer bailout,” Washington Examiner, 11/24/15)

Former CMS Chief Marilyn Tavenner Is Now Leading The Charge For A Bailout. “Meanwhile, the insurance lobbyist leading the industry’s push for more Obamacare bailout money is Marilyn Tavenner, Obama’s previous chief of CMS, now head of America’s Health Insurance Plans. AHIP says risk corridors aren’t the group’s top focus, but Tavenner is speaking out on it.” (Timothy P. Carney, “As exchanges falter, team Obamacare fights for an insurer bailout,” Washington Examiner, 11/24/15)

“In Summary: Tavenner Helped Build The Risk Corridor Program, And Then Went To The Industry That Would Get The Money.” (Timothy P. Carney, “As exchanges falter, team Obamacare fights for an insurer bailout,” Washington Examiner, 11/24/15)

Former United Exec Andy Slavitt Is “Promising” To Bail Out Former Employer. “Slavitt left the insurer with the biggest losses, and now is the government official promising to bail out his former employer.” (Timothy P. Carney, “As exchanges falter, team Obamacare fights for an insurer bailout,” Washington Examiner, 11/24/15)

Obama Administration Continues To Insist The Law Is Working (Despite All Evidence Otherwise)

HHS Official: Marketplace Is “Stable,” Consumers Have “Choices.” “‘This year, people looking for coverage in the marketplace continue to have a robust number of plan choices and as the data shows the marketplace is stable, vibrant and a growing source of coverage for new consumers. Today’s statement by one issuer is not indicative of the marketplace’s strength and viability,” [said Ben Wakana, a spokesman for the U.S. Health and Human Services Department].” (Dan Mangan, “‘Big’ bad day for Obamacare as UnitedHealth considers exit,” CNBC, 11/19/15)

Expert: “The Obamacare Business Model Doesn’t Work.” “‘The Obamacare business model doesn’t work,’ said Robert Laszewski, president of consultancy Health Policy and Strategy Associates in Virginia. ‘Obamacare has got to be retooled.’ Laszewski cited the fact that insurers overall still are losing money selling exchange plans in the second year of Obamacare, and that as a result many of them are raising prices, which could in turn lead to current and prospective customers taking a pass on further coverage.” (Dan Mangan, “‘Big’ bad day for Obamacare as UnitedHealth considers exit,” CNBC, 11/19/15)

“These People Are In Denial.” “‘The pro-Obamacare people, including the administration and all of the supporters, have really talked themselves into the notion that Obamacare is well-designed and it’s working,’ Laszewski said. ‘These people are in denial.’” (Dan Mangan, “‘Big’ bad day for Obamacare as UnitedHealth considers exit,” CNBC, 11/19/15)

AHIP CEO Marilyn Tavenner: We’ve Been Clear With POTUS About These Challenges. “‘We’ve been very clear with the Administration about the serious challenges facing consumers and health plans in this exchange market,’ Marilyn Tavenner, the CEO of the powerful insurer group America’s Health Insurer Plans, wrote in a statement.” (Sarah Ferris, “New ObamaCare angst as top insurer threatens to bail,” The Hill, 11/20/15)

American Health Insurance Plans (AHIP) Official: “Tremendous Uncertainty, Tremendous Instability” With Obamacare. “Clare Krusing, spokeswoman for the industry group America’s Health Insurance Plans, said that UnitedHealth’s comments Thursday reflect what members of AHIP have been experiencing themselves in recent months with their exchange products. ‘This has been a very challenging market; it’s still a market in transition,’ said Krusing.” (Dan Mangan, “‘Big’ bad day for Obamacare as UnitedHealth considers exit,” CNBC,  11/19/15)

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