Jan 21, 2016

Will Andy Slavitt Set the Record Straight Today?

Post by Freedom Partners

Arlington, VA — Today Centers for Medicare & Medicaid Services (CMS) Acting Administrator Andy Slavitt will testify before the Senate Finance Committee regarding the status of the Obamacare CO-OPs.

24 CO-OPs were originally created under the Affordable Care Act — to date, over half have failed. As a result, over $1.2 billion in taxpayer dollars has been wasted and over 750,000 people have been forced to find new health care plans.

Freedom Partners Senior Policy Adviser Nathan Nascimento issued the following statement: 

“The Obamacare CO-OP disaster should be indefensible, but today taxpayers will likely hear weak excuses for CMS’ incompetence and mismanagement. The truth is that the failed CO-OPs are just one symptom of the failed Affordable Care Act — both were doomed from the start. Government-run health care means less choice, higher costs, and broken promises from a clueless Washington bureaucracy. Period.”

Over Half Of CO-OPs Failed —Thousands Left Without Plans, Over $1B Wasted

WASHINGTON POST: More Than Half Of ACA CO-OPs Now Out Of Insurance Marketplaces. “More than half the nonprofit health insurance co-ops formed through the Affordable Care Act are now off the market for the coming year, with the last-minute departure of a plan in Michigan.” (Amy Goldstein, “More than half of ACA co-ops now out of insurance marketplaces,” Washington Post, 11/3/15)

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)

…But CMS Has Been In Denial From The Start

After First CO-OP Collapse, CMS Spokesman Denied Systemic Solvency Issues. “Aaron Albright, a spokesman for the federal agency implementing the law, said [Iowa’s] CoOportunity appears to be in a uniquely precarious position. ‘We do not believe that any other co-ops are facing immediate solvency problems,’ he wrote in an email to the Register.” (Tony Leys, “CoOportunity Health falters, taken over by state,” Des Moines Register, 12/30/14)