| | | What makes you say that they will go under?
......how about common sense from
a long life experience
ObamaCare Co-Ops Headed Toward $2.5 Billion Meltdown 25 Comments
02/11/2015 06:36 PM ET
Crony Socialism: Among ObamaCare's many bad ideas was the attempt to create an entirely new industry of nonprofit insurance co-ops. It is fast turning into a huge, multibillion-dollar taxpayer boondoggle.
Created as an alternative to an outright "public option," the co-ops have received $2.5 billion in low-interest loans to help them get started.
Only about 500,000 enrolled in one of the 23 co-ops that ObamaCare spawned, which works out to $17,000 per enrollee, according to an analysis by the Daily Signal, a news site started by the Heritage Foundation.
The loans were supposed to provide the co-ops a years-long cushion to get their premiums right. But even with all this help, one of them — CoOportunity Health — is already insolvent, forcing its roughly 68,000 enrollees in Iowa and Nebraska to switch to other plans.
Just months before it went belly-up, CoOportunity was being hailed "as one of the most successful of the 23 such health-insurance co-ops organized nationally," according to the Des Moines Register.
The Community Health Alliance in Tennessee froze enrollment this January after posting an $8.5 million loss in the first nine months of last year.
These are likely to be the first of many such financial problems. A Standard & Poor's report out this week found that all but five of the co-ops had negative cash flow through Sept. 30, and 11 had bigger loss ratios than CoOportunity.
S&P also found that "medical loss ratios" — the percentage of premiums that go to pay medical claims — were "hopelessly high" for several co-ops, a sign they enrolled too many high-cost patients.
An earlier report from insurance rating firm A.M. Best also found trouble brewing. All but one co-op had operating losses through last September that totaled nearly $244 million. That led A.M. Best to say it "is concerned about the financial viability of these plans."
Now the co-ops are in Washington, "pushing federal officials to make it easier for the nascent plans to get significant private funding to stay solvent," according to Politico Pro.
Among the sticking points is whether the government will go to the back of the line when it comes to collecting on those debts.
Washington needs to pull the plug on this dubious experiment, not waste still more money to keep it on life support.
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