The future of the 11 remaining health insurance co-ops set up through the Patient Protection and Affordable Care Act is very much uncertain.
A report released last week by the Government Accountability Office warned that four of the remaining nonprofit, member-owned insurers have not enrolled 25,000 members, the target set by the Obama administration.
On the bright side, six co-ops have.
Recommended For You
The report found that while over 1 million Americans were enrolled in co-ops in June of 2015, the majority of those were in plans that folded by the end of the year. On average, co-op members paid lower premiums than those enrolled in other types of PPACA plans, the report noted.
Republicans have seized on the report as more evidence that PPACA was designed to fail. On Tuesday, Rep. Jason Chaffetz, R-Utah, the chairman of the House Oversight and Government Reform, accused administration officials of ignoring a subpoena of documents related to the co-ops that the committee had demanded.
The fundamental challenge facing the roughly one dozen co-ops that have folded is rather simple, and mirrors that encountered by private insurers participating in the PPACA marketplace: premiums were not covering claims.
Like conventional insurers, co-ops have also suffered because of sharp funding cuts from Congress to the "risk corridor" program that reimburses PPACA insurers that incurred heavy losses during the first years of operation.
But co-ops were also specifically targeted by Congressional Republicans, who pushed a $1.4 funding cut for the co-ops in a 2013 budget deal that Democrats and the Obama administration accepted to avoid a debt default.
PPACA supporters got a dose of optimism last summer, when an Arizona co-op that had previously been expected to fail reported a dramatic increase in enrollment. But only a few months later the very same co-op announced it was shutting down.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
