“Two nonprofit health insurance co-ops that were established under the ACA announced on Friday that they were going out of business for financial reasons. The two organizations in Colorado and Oregon are the latest in a string of eight such coops that have closed their doors in recent months, according to The Hill. That means that only 15 of the original 23 co-ops will remain in business next year – unless of course more decide to fold in the coming weeks.
We should know fairly soon whether other co-ops will fold because the sign-up period for next year’s Affordable Care Act coverage begins November 1 and the remaining co-ops must decide whether to stay in business.
Amy Goldstein of TheWashington Post first reported on the full extent of the co-ops financial crisis last week. The non-profit health plans were conceived of as a “consumer-friendly counterweight” to traditional for-profit insurers – and as a way to encourage more competition and greater consumer choice, according to the report.
The federal government provided billions of dollars in loans to help get these co-ops off the ground. But many of them had ragged startups and were troubled by highly flawed enrollment and business models.
Alarmed by these serious shortcomings, the Centers for Medicare and Medicaid Services (CMS), which oversees Obamacare, issued warning letters to 11 of the co-ops, placing them under special scrutiny and requiring that they produce a plan of “corrective action.”
Instead of finding a way out of the morass, many of the co-ops simply threw in the towel. It began in February when a program that served residents of Iowa and Nebraska announced it was folding. That was followed in July by the shuttering of a co-op in Louisiana, according to The Post.” - Obamacare Falls Short on Sign-Ups While Co-Op System Crumbles, thefiscaltimes.com, 10/18/2015
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