GOP Lawmakers Question Obamacare Loan Program

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Thursday, 21 Nov 2013 09:59 AM

By Lisa Barron

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A group of Republican lawmakers have asked Health and Human Services Secretary Kathleen Sebelius to explain $2 billion in loans to non-profit health insurance issuers known as Consumer Operated and Oriented Plans, or CO-OPs, and whether the taxpayer dollars will be returned.
 
"Recent events, including the rollout of the health care marketplace exchanges on October 1, have deepened our concerns about the success of CO-OPs and the probability of taxpayers being repaid for the $2 billion that was loaned to these plans," they wrote Wednesday in a letter spearheaded by Sen. Orrin Hatch, ranking Republican on the Senate Finance Committee.

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The lawmakers cited two reports by the inspector general for the Department of Health and Human Services (HHS) that identified several risks within the CO-OP program, noting, "11 of 16 CO-OPs reported estimated startup expenditures . . . that exceeded the total startup funding ultimately provided," producing a "risk that CO-OPs exhaust all startup loan funding before they are fully operational or before they earn sufficient operating income to be self-supporting."
 
In addition to Hatch, the letter was signed by Republican Sens. Lamar Alexander of Tennessee, Mike Enzi of Wyoming, Tom Coburn of Oklahoma, and Republican Rep. Charles Boustany of Louisiana.
 
The letter isn't the first time members of Congress have asked for information about the new Obamacare loans to non-profit insurers offering qualified health plans to individuals and small groups, reports WorldNetDaily

Last year, a similar group of Republican senators and representatives wrote to Sebelius about the funding and structure of the CO-OP program.
 
The latest letter states, "When we wrote to you in May 2012, we noted that there was little evidence that the CO-OP program would promote greater competition and lower costs in most state insurance markets, and we questioned whether HHS had significantly underestimated the financial risk."

It continued, "The responses to our letter from CMS [Center for Medicare and Medicaid Services] Administrator Marilyn Tavenner — which were delivered on your behalf more than nine months after we sent our letter — did little to assure us that HHS or CMS was prepared to address these issues."
 
The lawmakers also noted that HHS has already terminated the loan to the Vermont CO-OP, which was denied a license by the state to operate.
 
"Please provide all documents related to (1) the Vermont CO-OPs failure to obtain an insurance license and (2) HHS's decision to terminate the Vermont CO-OP loan," they wrote.
 
They also asked for information on how much of the $2 billion HHS expects to be repaid and in what time frame.
 
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