The Obamacare co-ops are not cooperating very well these days. The new failures among this group of cobbled together "insurers" is both leaving consumers scurrying for health coverage and, on a larger scale, raising questions about whether the state insurance exchange network can truly cultivate a competitive market.
According to the The Hill, exchanges in Ohio, Oregon, and Illinois have failed since the beginning of the year. Of the original 23 co-ops created to stimulate competition on the exchanges, only seven are now operational.
The fiscal health of the co-ops are monitored by state regulators and, as the exchange system has evolved, most haven't been able to remain viable. Without the deep pockets of the major insurance companies, the co-ops have been battered by the risk adjustment assessments of the Centers for Medicare and Medicaid Services.
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The Hill reports that the four that failed this year did so within days of the CMS June 30 announcement of the numbers insurers would have to pay or receive in risk adjustment costs.
Co-op officials and state regulators are blaming CMS's refusal to adjust its formula to better accommodate the challenges faced by the co-ops, The Hill says.
Meantime, in Ohio and Illinois, regulators are reportedly in discussions with health insurers to try to mitigate the effects of the mid-year failures. State officials are asking the insurers to take on co-op consumers at the same terms offered by co-op plans.
The goal is to allow consumers to keep the out-of-pocket payment levels they had reached with their co-op coverage rather than being forced to start over again with new coverage.
Oregon's approach is more direct, The Hill says: It is ordering remaining insurers to accept individuals who lost coverage without making them start over on their deductibles and out-of-pocket payments, to avoid additional marketplace turmoil.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
