14th Obamacare Co-op Collapses as Health Care Costs Continue to Rise
Last week, Connecticut’s Obamacare co-op health insurer became the 14th out of 23 co-ops to fail. According to Representative Fred Upton (R-MI), “With Connecticut’s collapse, the administration’s failures are closing in on a $1.5 billion hole for taxpayers.”
The co-ops, or consumer operated and oriented plans, were created to inject competition and choice in state exchanges that Obamacare made uncompetitive. In 2013, the Centers for Medicare and Medicaid Services awarded the 23 co-ops $2.4 billion in startup and solvency loans to help the new nonprofit insurance companies get off the ground.
However, more than half of the co-ops have failed to stay above water in the health insurance market, despite the $1.5 billion in loans the 14 collapsed co-ops collectively received. HealthyCT alone received nearly $128 million in loans.
News of the latest Obamacare failure comes just as Republicans on two major House committees concluded that the Obama administration went around Congress to authorize $7 billion in funds to insurance companies for a consumer cost-reduction program in state exchanges.
Despite the billions of dollars in taxpayer subsides, Obamacare continues to fail to lower cost and increase choice in the health care industry. Congress should act to repeal Obamacare and enact patient-center health care reform.