Thursday, July 28, 2016

ACA/Obamacare: The Incredible Shrinking Selection

“Humana will stop marketing Obamacare exchange plans in several states next year and will exit many off-exchange individual markets as well, the company announced today.

The decision means the company will only offer individual plans in 156 counties in 11 states, down from 1,351 counties across 19 states this year. It had sold plans on Affordable Care Act exchanges in 15 states this year.” - Humana pulling out of many Obamacare markets, Politico, 07/21/2016

Link to the entire article appears below:

Wednesday, July 27, 2016

ACA/Obamacare: Want to Lose Some Serious Money? Be an ACA Exchange Co-Op or Insurer

“Since Obamacare’s rollout in the fall of 2013, 16 co-ops that launched with money from the federal government have collapsed.

The co-ops, or consumer operated and oriented plans, were started under the Affordable Care Act as a way to boost competition among insurers and expand the number of health insurance companies available to consumers living in rural areas.

Now, just seven co-ops—Wisconsin’s Common Ground Healthcare Cooperative; Maryland’s Evergreen Health Cooperative; Maine Community Health Options; Massachusetts’ Minuteman Health; Montana Health Cooperative; New Mexico Health Connections; and Health Republic Insurance of New Jersey—remain.”

“The Centers for Medicare and Medicaid Services awarded $2.4 billion to 23 co-ops that were eventually created. However, the majority of the co-ops struggled to turn a profit, resulting in the collapse of 16 of the original 23 that received $1.5 billion in startup and solvency loans.

Now, with just seven co-ops remaining, regulatory filings show that many ended 2015 in the red.”

“Since Obamacare’s implementation, it’s not only co-ops that have struggled to make money.

Oscar, a startup insurance company serving New York and New Jersey that launched in 2012, lost $105 million in 2015.

Additionally, UnitedHealth Group CEO Stephen Hemsley said the company expects to lose more than $1 billion from its exchange business—$650 million in 2016 and $475 million in 2015.

The company, which is the nation’s largest insurer, decided to pull out of at least 26 of the 34 exchanges it offered coverage on last year after warning the marketplaces were a risky investment.

And Health Care Service Corporation, which operates Blue Cross Blue Shield plans in five states, reported losses totaling $65.9 million in 2015. The company lost $281.9 million in 2014.” - 16 Obamacare Co-Ops Collapsed. Here’s How the Rest Are Faring, The Daily Signal, 07/26/2016

Link to the entire article appears below:



Wednesday, July 13, 2016

ACA/Obamacare: Oops for the Fifteenth Time! Yet Another Co-Op Implodes

"Fifteen Obamacare co-ops have now failed. Oregon announced Friday that its second taxpayer funded Obamacare co-op would close its doors, leaving 40,000 to find new insurance. The co-op, known as “Oregon’s Health CO-OP now joins a list of 14 other Obamacare co-ops that have collapsed including Health Republic Insurance of Oregon which closed last year. Failed co-ops have now cost taxpayers more than $1.5 billion in funds that may never be recovered.

Co-ops were created as not-for-profit alternatives to traditional insurance companies created under Obamacare. The Centers for Medicare and Medicaid Services (CMS) financed co-ops with startup and solvency loans, totaling more than $2.4 billion in taxpayer dollars. Co-ops were envisioned as innovative providers that could provide member-driven care without needing to worry about recording a profit. In practice, they have failed to become sustainable with many collapsing amid the failure of Obamacare exchanges.

Since September, 12 Obamacare co-ops have collapsed, with only 8 of the original 23 co-ops remaining. Oregon’s Health co-op faced losses of $18.4 million last year and owed the federal government close to $1 million. Co-op across the country have struggled to operate in Obamacare exchanges, losing millions despite receiving multiple government subsidies.

The mass failure of co-ops should not be surprising. Larger insurance companies have also struggled to operate in Obamacare exchanges with many announcing they will stop providing coverage.

The web of government subsidies have also failed to provide insurances the funds they were promised. One of these programs, Risk corridors recouped just 12.6 percent of the funds that insurers requested. The program, which was created to encourage insurers to take on higher risk individuals by transferring funds from insurers who made money to those that posted losses, was required to be budget neutral under law leaving Obamacare insurers with a significant shortfall.

Obamacare co-ops have also been plagued by inept management and unrealistic business models.

As a report by the Daily Caller’s Richard Pollock found, 17 of the 21 co-ops paid out gratuitous salaries to executives reaching as high as $587,000, which is more than four times as much as the $135,000 median health insurance executive salary. Worse still, many of these executives had little to no experience in the insurance industry and some of these excessive salaries were disguised in financial documents as “management fees”. Last year, 21 of 23 co-ops posted losses." - Oregon Obamacare Co-op Becomes 15th to Collapse, Americans for Tax Reform, 07/11/2016

Link to the entire article appears below:

Friday, July 8, 2016

ACA/Obamacare: The Incredible Shrinking ‘Competitive’ Co-Ops

‘Another Obamacare co-op, Connecticut’s HealthyCT, is closing its doors, and at least two most could follow suit as the nonprofit insurers decide whether they will be able to remain on firm financial footing.

The nine remaining co-ops of the original 23 co-ops must make payments totaling at least $130 million through Obamacare’s risk adjustment program, which could damage their viability.

The Connecticut Insurance Department announced Tuesday that HealthyCT was placed under state supervision, leaving approximately 40,000 Connecticut residents to find new health insurance during the next open enrollment period.

HealthyCT is the 14th co-op created under Obamacare to fail since the health care law’s exchanges opened in 2013.

The co-ops, or consumer operated and oriented plans, were created to inject competition and choice in areas where little existed. 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 succeed 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, which included an infusion of $48.4 million in solvency loans awarded in September 2014.

Katharine Wade, state insurance commissioner, said HealthyCT’s “hazardous financial condition” led her to close the co-op’s doors. The nonprofit insurer’s financial issues were compounded after the Centers for Medicare and Medicaid Services announced last week the payments insurers must make under Obamacare’s risk adjustment program.

The Department of Health and Human Services asked HealthyCT to pay $13.4 million into the risk adjustment program, which redistributes money from insurers with healthy customers to insurers with sicker, more costly consumers.

“Unfortunately HealthyCT’s financial health is unstable, having been seriously jeopardized by a federal requirement issued June 30, 2016, that it pay $13.4 million to the U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services as part of the Affordable Care Act’s risk adjustment program,” Wade said in a statement Tuesday. “As a result, it became evident that this risk adjustment mandate would put the company under significant financial strain.”’- Obamacare’s 14th Co-Op Is Closing Its Doors, and at Least 2 More Could Close Soon,, 07/06/2016

Link to the entire article appears below: