Nearly half of all ObamaCare co-ops have collapsed – more could fail by year’s end
Critics said that healthcare co-ops set up to dispense “free” medical care to the nation’s uninsured under ObamaCare would collapse and, so far, nearly half of them have – leaving millions of “insured” Americans with nowhere to go when accidents or illnesses strike.
The states that have seen their ObamaCare co-ops financially collapse include Utah, Kentucky, New York, Nevada, Louisiana, Oregon, Colorado, Tennessee, South Carolina and a co-op that served both Iowa and Nebraska.
The failures, which have come more quickly than even those who opposed to ObamaCare originally predicted, have proved one thing. Despite the way ObamaCare was rushed through Congress and signed into law by President Obama or the way low-income voters cast their ballots on Election Day, healthcare isn’t free.
And the bloodletting isn’t over.
Experts say that the co-ops are failing because of artificially low premiums, strict regulations and the old and sick signing up for free healthcare while the young and healthy sit things out choosing to pay a fine instead.
This lethal combination of facts – which critics said were self-evident when ObamaCare was forced on the American people – are on track to run the remaining state healthcare co-ops out of business before the end of next year.
“In most cases, they priced too low relative to what their claims costs were going to be, that’s what the operating margins were all about,” said Thomas Miller, a fellow specializing in health care policy at the American Enterprise Institute.
“Now what made them attractive was they’re offering lower premiums so more people want to sign up for that, but that’s a dangerous proposition where you’re making up your losses on volume.” “You’re getting more people, but those extra enrollees you’re bringing in are being underwritten at a loss.”
Ali Meyer, writing for the Washington Free Beacon, quoted Nathan Nascimento, a senior policy adviser at Freedom Partners as saying:
“The co-ops are losing more than they’re bringing in because they’re paying out for older, sicker populations and don’t have enough younger, healthier people to help share the cost burden” “This is in part because the monthly premiums set up by the co-ops were set artificially low compared to other plans.”
“Co-op insurers are heavily subsidized and operate under strict regulations,” he explains. “They’re more heavily regulated than other insurance plans offered in the health care exchange.”
“When you have artificially low premiums, a pool of people requiring more payouts, increased regulations, and reductions in risk corridor subsidies, it’s the perfect storm of insolvency,” he said.
“They’re a public option comprise concept that clearly does not work – a thought experiment that is not practical in reality.”
Akash Chougule, deputy director of policy at Americans for Prosperity, says that as costs continue to rise, less people will enroll, causing more co-ops to go out of business.
“It doesn’t require an advanced degree in economics to see why this is unsustainable.” “As costs and premiums continue to increase, people will increasingly avoid enrolling.
And as co-ops succumb to the reality of higher rates, they’ll continue failing at their alarming pace.”
Nascimento added that:
“More co-ops will likely fail – they were doomed from the start.” “We’re already seeing another coop collapse, this time in Utah, with 66,000 people losing their health care coverage and costing taxpayers more money – $89,650,303 to be exact.”
As more state co-ops close down, people who bought into the idea of free or low-cost healthcare under ObamaCare will have fewer plan choices, could face higher co-pays and annual deductibles before “free healthcare” kicks in and would likely be penalized by the federal government if they drop out of the system.
One story out of New York describes a nightmare for hundreds of cancer patients who lost access to their doctors at the world-renowned Memorial Sloan Kettering Cancer Center in Manhattan. According to New York Post report:
“Health Republic Insurance of New York, which has lost $130 million dollars in 18 months, was the only ObamaCare exchange insurer contracted with the Memorial Sloan Kettering Cancer Center in Manhattan.
250 Health Republic members receiving care at Sloan Kettering need to find a new insurer by November 15 that the hospital takes or prepare to shoulder the cost themselves. New York is forcing their carrier to close shop at the end of this month for losing so much money.”
Did someone say “death panels”?