The money is gone and it might never come back. That's what some in the Obama administration fear about the more than $1 billion it poured into health insurance co-ops that failed.
Although originally envisioned as an innovative tool to empower health consumers to bring down the cost of insurance, 12 of the 23 co-ops that were part of the PPACA individual marketplace have failed, mostly due to an inability to cover their members' claims.
Critics of PPACA have held up the co-op failures as evidence of incompetence by the administration.
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According to a report in the Wall Street Journal, just about everybody feels ripped off by the co-op fiasco, including many of the co-ops themselves.
For starters, doctors, hospitals and other providers complain that they have provided millions of dollars in services for which they were never reimbursed by the now-defunct insurers.
And of course, the Obama administration isn't happy about the money it spent on a failed product. Officials tell the Journal that the administration is willing to take legal action to recover the funds.
But leaders of the 11 remaining co-ops say the feds' efforts are in vain.
"In terms of collections, no. There's nothing to collect," Dr. Martin Hickey, head of the National Alliance of State Health Co-ops, told the Journal. "Will there be a little money left? Yeah, maybe.
"Co-op leaders also have accused the federal government of reneging on its commitment to support them, both by reducing the amount of startup loans available and by devising a flawed risk-adjustment formula, which is supposed to distribute money from plans with healthier members to those saddled with higher-cost ones.
In fact, an Oregon co-op that was forced to close is planning a lawsuit against the federal government and could be joined by other co-ops. The suit alleges that the administration owes the defunct insurers more than $5 billion in risk corridor payments.
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