About half of Obamacare’s Consumer Operated and Oriented Plans, or co-ops, have imploded, leaving nearly half-a-million Americans looking for new health coverage.
And instead of addressing the problem, the Obama administration is pretending it doesn’t exist.
That’s the assessment of Rep. Adrian Smith, R-Neb., a member of the House Ways and Means Committee who recently wrote about the spate of failures in the Wall Street Journal.
“When it passed Congress in 2010, the Affordable Care Act offered substantial financial support to create nonprofit health-insurance plans. Today 11 of the 23 such regional Consumer Operated and Oriented Plans have failed – seven since the beginning of October,” Smith wrote.
“They’ve collapsed despite federal startup loans totaling more than $1.1 billion. These loans will likely never be fully repaid, while insurers and consumers will be on the hook for any unpaid claims left behind by failed insurers,” he added.
The congressman estimates 400,00-500,000 Americans lost their coverage in those 11 failed co-ops.
In an interview with Radio America, Smith says the co-ops were doomed from the start.
“I think they were improperly structured. They were allowed to charge too low a premium, not reflecting the actual costs. They thought the original subsidies – or loans if you will, but let’s face it, they’re subsidies, especially since they’re so unlikely to be repaid. That wasn’t enough,” said Smith, who is fuming more as he learns how these collapses transpired.
“The more I am learning about this entire situation, the more offensive it is, and this is just one part of Obamacare,” Smith said.
The congressman said what galls him most is that the government forced many people out of coverage they liked and then left those same people out in the cold.
“The thing that bothers me the most is when a good, upstanding citizen is doing everything they’re supposed to do to be a responsible individual,” Smith said. “Yet they are faced with canceled coverage, or they’re faced with a penalty for taking care of themselves.”
Adding to Smith’s frustrations is what he believes is utter indifference to the problem from the Obama administration.
“We had a hearing earlier this week, and the chief of staff from [the Centers of Medicare and Medicaid Services] was our witness,” Smith said. “[Dr. Mandy Cohen] sent the message that everything is just fine in the Obamacare co-op arena.”
He said it’s quite obvious that co-ops are not “just fine.”
“It’s not a win,” Smith said. “Nearly half of the co-ops have collapsed and that’s from New York to Nevada. Ours, with Nebraska and Iowa together, we were the first to collapse a year ago. Now we see them collapsing at a much quicker pace.”
How can the Department of Health and Human Services, or HHS, say all is well when almost half the co-ops have failed?
“In a very dismissive manner, I have to say, and it’s disappointing,” Smith said. “I started asking questions almost a year ago and HHS is not offering any answers.”
Not only is the government doing little to help, in some circumstances it is actually pushing co-ops to their deaths.
“The administrators of the Nebraska-Iowa plan saw a larger number of people sign up for their plan than they originally anticipated,” Smith said. “So they requested permission from HHS to suspend enrollment, to basically cap that at a number they figured was more manageable. They were prohibited by HHS from capping the number of enrollees.”
The congressman said that hastened the demise of the Nebraska-Iowa co-op. He said HHS did give permission for the Tennessee co-op to cap enrollment, but it collapsed anyway.
In the meantime, Smith is sponsoring legislation that would protect those who lost coverage with the failure of the co-ops from being fined by the IRS for not having coverage as mandated by federal law.
He believes all of Obamacare will eventually crater, but he hopes too many people aren’t hurt in the process.
“Ultimately, I think it collapses under its own weight,” he said. “I just want to do everything I can to minimize the damage in the ensuing time. That’s what weighs heavy on my mind is that the heavy hand of the federal government is actually hurting the very people Barack Obama was saying he was wanting to help.”