ObamaCare Co-Ops Hit With Huge Losses

ObamaCare Co-Ops Hit With Huge Losses, Audit Finds

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BY JOHN MERLINE

07/31/2015 

In inspector general report released this week finds that all but one of the 23 nonprofit insurance co-ops created by ObamaCare are in dire financial straits, with several running substantial losses last year.

The IG report notes that most of the co-ops missed their enrollment goals last year, some by wide margins. Signups at three co-ops were just 4% of what they'd planned for.

The IG also found that 19 of the 23 did far worse financially than they'd expected in 2014, with more than half having net losses of $15 million or more.

This could put significant taxpayer money at risk. To get the co-ops up and running, ObamaCare provided $2.9 billion in low-interest startup and solvency loans. The IG warns that several might have trouble paying them back.

While low enrollment hurt many of the co-ops, high enrollment numbers were no guarantee of success either. The Kentucky Health co-op exceeded its 2014 enrollment goal by 83%, yet had a $50 million loss that year, the biggest loss of any of the co-ops.

The CoOpportunity signed up seven times the number expected in Iowa and Nebraska, and yet was the first one to fail when it closed shop earlier this year.

Louisiana's insurance department announced recently that the Louisiana Health Cooperative would cease operations at the end of the year. And the Tennessee co-op — which lost more than $22 million last year — had to freeze enrollment in January.

The IG notes that the Centers for Medicare and Medicaid Services, which runs ObamaCare and oversees the co-op program, has put four of them "on enhanced oversight or corrective action plans."

The IG also found that co-ops in several states priced their plans above their for-profit competitors, despite the fact that the co-ops were created specifically to put downward pressure on premiums.

Meanwhile, 17 ObamaCare co-ops have put in for double-digit rate increases for 2016, according to an IBD review of rate requests, all of them citing ongoing losses.

Follow John Merline on Twitter: @IBD_JMerline.

Read More At Investor's Business Daily: http://news.investors.com/blogs-capital-hill/073115-764541-obamacare-coops-hit-with-huge-losses-last-year-audit-finds.htm#ixzz3hlUhPrgJ
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