“After receiving $2.5 billion in taxpayer dollars from the federal government, the vast majority of nonprofit insurance companies created under the Affordable Care Act recorded losses in revenue, an analysis by The Daily Signal found.
Consumer Operated and Oriented Plans, or co-ops, are nonprofit insurance companies created by the Affordable Care Act. Though the concept is not new, 23 of these entities were created to foster competition in areas where few options are available.
Now, CoOportunity, a co-op created to serve Iowa and Nebraska, will be liquidated. Some lawmakers question the viability of the remaining 22 co-ops.
The Daily Signal examined the latest quarterly filings for 22 of the 23 co-ops and found that just one was profitable last year. Data was not available for New Jersey’s co-op, Health Republic Insurance of New Jersey.
The co-ops received an average of $108.7 million each through the program set up under the Affordable Care Act, leaving taxpayers on the hook for billions if the insurers fail to repay their loans.
“That speaks to the problems with a lot of federal loan programs,” Republican Rep. Adrian Smith of Nebraska told The Daily Signal.”
“According to the Oversight committee, allegations of fraud surrounded many of the co-ops that received taxpayer dollars from the federal government.
And several investigations conducted by the Washington Examiner found that co-ops in Louisiana, Maine, Ohio and New York and their top officials had checkered pasts.
The Louisiana Health Cooperative’s former Chief Executive Officer Terry Shilling benefited from a $4 million contract at a consulting firm where he worked as a principal. The Securities and Exchange Commission also sanctioned Shilling for insider trading in 1998.
The co-op received $65.7 million from Centers for Medicare and Medicaid Services.
Similarly, the Maine Community Health Options co-op was investigated by the Oversight Committee after it learned the co-op’s president, the Rev. Bob Carlson, had a history of sexual child abuse. Carlson later committed suicide.
Maine Community Health Options received $132.3 million from the federal government, including $67.6 million in solvency funding awarded in September 2014.
The company behind the Ohio co-op, Coordinated Health Mutual, has a long history of issues, including having been overpaid $10 million by South Carolina’s Medicaid program and owing thousands in back taxes to the state of Kentucky.
Two of the company’s top officials also had troubled business pasts. Brett Baby, CEO of the co-op, started an insurance company that was later shuttered by state regulators. Dale Schmidt, CEO of the company behind Coordinated Health Plans of Ohio, filed for bankruptcy for four companies he also owned.
Coordinated Health Mutual received $129.2 million from Centers for Medicare and Medicaid Services.” - One Year After Obamacare’s Implementation, Taxpayer-Funded Co-Ops Struggle to Survive, dailysignal.com, 02/09/2015
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