Half of the “co-op” health plans started under ObamaCare have collapsed amid deep financial problems. Twelve of the 23 co-ops established under the Affordable Care Act have gone under or are predicted to go under by the end of the year. Now, many of their customers are scrambling for coverage as their plans are eliminated.
A bunch of the struggling co-op programs announced that they would be closing in October. The reason for the flood of closures is widely believed to be because a number of state regulators took aim at the weakest co-ops before the current enrollment season began. This was done in order to give consumers the opportunity to pick a new plan before the enrollment period ended. The Obama administration has said that no more money will go toward the formation of new Obamacare co-ops.
The Obamacare co-ops are government-backed, nonprofit health insurers. Lawmakers on Capitol Hill are now demanding answers about the failures. Many of them are worried about the unrest that could be caused by the closing of the co-ops.
The closing of the co-ops is also putting taxpayer money at risk. The Obamacare co-ops have been backed by more than $2 billion in taxpayer loans. Lawmakers are now wondering whether the loan money will be repaid.
The people hurting the most are the ones whose health care was being provided by these plans. Many of them are now forced to seek coverage on HealthCare.gov or one of the state exchanges. A statement from regulators stated that they were focusing on making sure “consumers are protected, consumers are given options, and consumers do not have a gap in coverage.”
States with closing co-ops that have their on their own state-based exchange would likely absorb the co-ops’ customers on their exchange. Nine of the closing co-ops will be operating under the federal HealthCare.gov. It is possible that more Obamacare co-ops will fail in the near future, but it could take another year before the fate of the remaining co-ops will be known.
Lawmakers also continue to be concerned about the increasing costs of the program. Premiums for the plans offered continue to rise at an alarming rate, making the plans unaffordable for many. Premiums for most Americans are expected to increase more in 2016, with insurance companies seeking rate increases between 20 and 40 percent.