Colorado’s Obamacare co-op will shut down. The announcement comes just two days after Tennessee’s Obamacare co-op announced it will also close. Colorado becomes the seventh co-op to have shut down this year, joining co-ops in Tennessee, Nevada, New York, Kentucky, Louisiana, and Iowa/Nebraska, leaving taxpayers on the hook for almost $835 million. Despite this taxpayer funding, the Centers for Medicare and Medicaid Services (CMS) has refused to release information about troubled exchanges, nor has it developed viability guidelines.
According to a report by the Washington Examiner, the co-op has been decertified by the state’s insurance regulator and will no longer provide insurance. Colorado’s co-op had enrolled around 80,000 customers, one of the largest providers in the state.
Obamacare created the Consumer Operated and Oriented Plan (co-op) program which would provide funding for the creation of “member-driven” providers of healthcare insurance that would not answer to shareholders. For this purpose, CMS has loaned over $2.3 billion to 23 co-ops across the country.
Many co-ops have experienced troubling financial losses in their short lives. In fact, the Colorado co-op had losses totaling $23 million last year.
The co-op was hoping for financial relief through the “risk corridor” program created by Obamacare. In theory, this program allows insurance companies to cover high risk individuals and keeps premiums low by taking funds from more successful providers and giving them to less successful providers.
In reality, there are not enough insurance providers making money under Obamacare. Providers had requested $2.87 billion in payments for 2014 but found that they would only be receiving $362 million, just 12.6 percent.
Failed co-ops nationwide have now caused 510,000 individuals to lose health insurance.
It seems certain that more co-ops will soon fail, once again displacing thousands and costing taxpayers millions. Tough questions need to be asked of the hands off approach taken by CMS, and its administrator Andy Slavitt.
A list of failed co-ops and their cost to taxpayers is below.
|
State |
|
|
Nevada |
$65,925,396.00 |
|
Colorado |
$72,335,129.00 |
|
New York |
$265,133,000.00 |
|
Iowa/Nebraska |
$145,312,100.00 |
|
Kentucky |
$146,494,772.00 |
|
Tennessee |
$73,306,700.00 |
|
Louisiana |
$65,790,660.00 |
|
Total |
$834,297,757.00 |