“WASHINGTON (AP) — Fed up with the insurance industry, Democrats used the health care overhaul to create nonprofit co-ops that would compete with the corporations. Now a government audit finds co-ops are awash in red ink.
Only one out of 23 — the co-op in Maine — made money last year, said Thursday's report from the Health and Human Services inspector general's office. Thirteen lagged far behind their sign-up goals for 2014.
The Massachusetts co-op spent more than six times as much on administrative expenses as it collected in premiums.
The audit raised questions about whether co-ops will be able to repay $2.4 billion in taxpayer-financed loans that President Barack Obama's overhaul provided to help stand them up.
"The low enrollments and net losses might limit the ability of some co-ops to repay startup and solvency loans, and to remain viable and sustainable," said the report.
The inspector general recommended closer supervision of the co-ops by the Obama administration as well as clear standards for recalling loans if a co-op is no longer viable.” - Health Insurance Co-Ops Bleed Red Ink, insurancenewsnet.com, 07/30/2015
Link to the entire story appears below: