We Are Funding Obamacare Co-ops with an Expected 42% Failure Rate

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health co-op,the nes Solyndra

The healthcare law mandates the setting up of healthcare exchanges and co-ops. Both are going badly.

Healthcare exchanges are not going to be ready to be opened in January, 2014 despite having three years to prepare. They will conveniently be put off until after the election in January 2015. They are the public option masquerading as free market. They are completely controlled by the government and most states will simply let the government run them.

But we have the free market option of co-ops, don’t we?

Obamacare allows for the establishment of 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 will offer qualified health plans in the individual and small group markets. Organizations participating in CO-OP programs must be non-profit entities.

Once formed at great expense to the taxpayer, they can put the co-op into the exchange to compete even though it is known they can’t compete.

Many of the people starting up the exchanges have no experience. One has experience providing the poorest service in New York. [Greta Van Susteren expose April 4]

Co-ops are fatally flawed. 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 – no conflict of interest there. They can succeed if they move beyond what they are and join forces with other co-ops and the moon and the stars are correctly aligned in the heavens. [rwjf research]

The government has given co-ops $3.8 billion taxpayer dollars to start up though the failure rate could be about 35% to 40%. The failure rate could be 42%. We don’t know. Though it might be 35% or even 20%. No one expects it to be 40% but they’re just mentioning it. Even if 35% default, that doesn’t mean HHS will lose all their money (Uh, excuse me, that’s OUR money.) [the hill]

The House Committee on Oversight and Government Reform under Darrell Issa would like information on the co-ops to see where our money is going. They asked in February but Sebelius failed to comply. They asked again at the end of March and have greatly expanded their probe. [Washington Examiner]

Immediately after Obamacare passed, slews of ACORN-like (Alinsky-style) co-ops formed. Heavily subsidized with tax dollars, the co-ops need not be set up by anyone who has any experience or record of success. With all the rules being thrown out by HHS, they didn’t feel the need to have any rules about this.

One of these co-ops is The Common Ground Healthcare Cooperative, an Alinsky-style ACORN group. It formed in August, 2011 at the same time the tax dollar incentive became known.

Obama gave this co-op $56 million to start up their health insurance company even though they have basically no experience in the area.

The Alinsky group is an operation out of Chicago.

…A Saul Alinsky-tied group has been awarded a $56 million federal loan to start up a nonprofit health insurance company — one of several organizations across the country this week tapped to launch a new network of insurers under the sponsorship of the federal health care overhaul.

The Wisconsin group, Common Ground Healthcare Cooperative, was awarded the funding on Tuesday. According to the Department of Health and Human Services, the group is expected to provide coverage statewide within five years after starting on a smaller scale in early 2014…Read more: FoxNews

If this isn’t ripe for corruption, I don’t know what is.

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