Obamacare CO-OPs were meant to be one of the vehicles by which Obamacare was to be delivered. They’re failing and the Obama administration has been keeping it a secret from the public who funded them with $3.8 billion in start-up cash.
Federal officials have been keeping a secret list of 11 Obamacare co-ops on the verge of failing. Nine of the original 24 have already failed, according to Daily Caller.
When the co-ops were created, the Congressional Democrats exempted them from public disclosure rules that apply to all other publicly traded insurance companies and other publicly traded corporations on such exchanges as the New York Stock Exchange. Just to remind people, it was always expected they would have at least a 40% failure rate if they survived at all as per HHS (Health and Human Services).
Community Organizations like ACORN were involved in taking tax dollars to set up Obamacare CO-OPs and they had no experience according to an April 4, 2013 report by Greta Van Susteren of Fox News.
Obamacare allows for the establishment of a Consumer Operated and Oriented Plan (CO-OP). A CO-OP is a federal program created to assist in the development of non-profit, member-run health insurance issuers.
The issuers offer qualified health plans in the individual and small group markets and were meant to provide competition for government plans that have access to unlimited tax dollars. Organizations participating in CO-OP programs must be non-profit entities and they are eligible for tax dollars. This was supposed to be our free market component.
Immediately after Obamacare passed, slews of ACORN-like (Alinsky-style) CO-OPs formed.
One of those CO-OPs was The Common Ground Healthcare Cooperative. It formed in August, 2011 in Wisconsin at the same time the tax dollar incentive became known. It was one of many that instantly appeared.
This particular one was anti-Scott Walker and Wisconsin is a swing state.
The Obama administration gave the operation, which is out of Chicago, $56 million in start-up money even though they have basically no experience in the area.
It is now one of the CO-OPs doomed to failure. It has reached 80% enrollment or more, received $108 million in loans from the federal government AND finished 2014 with a $36.5 million deficit, according to a report from the Inspector General’s office of the Department of Health and Human Services (HHS).
CO-OPs were viewed as fatally flawed from the onset. They can’t compete with the government-subsidized option and they can’t compete with large insurance companies.
Enrollees are in charge of decisions affecting costs – it’s member-driven. It was believed they could succeed if they are able to move beyond what they are and join forces with other co-ops and that would happen when the moon and the stars are perfectly aligned in the heavens.
HHS itself estimated a default rate of 40% for the planning loans and 35% for the solvency loans. Still we gave them $3.8 million, according to the hill.
The House Committee on Oversight and Government Reform under Darrell Issa requested information on the CO-OPs in February and March of 2013 but Sebelius failed to comply, the Washington Examiner reported. By February, 2014, they were able to report that they were doomed to failure.
Co-ops have reached or come close to their projected enrollment and are still losing tens of millions. That means taxpayers can expect to lose a minimum 43% on their investment. That’s nothing unusual for a government “investment.”
The only surprise is that the predictions were for a 40% failure rate when something closer to 100% was more realistic. The member-driven concept was never meant to succeed or if it was the administration is even dumber than we thought. Obamacare is only about control. Insurance companies are controlled by the government and doctors are essentially employees of the government. We are on a path to universal healthcare as they planned.