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Obamacare Co-Op Failures Disrupting Health Coverage

Obamacare Co-Op Failures Disrupting Health Coverage
(AP Photo/Kiichiro Sato)

By    |   Monday, 01 August 2016 02:30 PM EDT

A series of co-op failures is causing problems for thousands of Obamacare enrollees, leading some to question if regulators could have prevented the shutdowns.

One failed provider, CoOportunity, in Iowa and Nebraska shuttered in 2015 and probably shouldn't have gotten that far, officials suggested.

"I will say CoOportunity should never have been allowed to go into the 2015 year, either by the co-op or by ourselves, and I think that's a very fair criticism in looking back," said Andy Slavitt, acting administrator of the federal Centers for Medicare and Medicaid Services, according to The Hill

Out of 23 co-ops set up under Obamacare nationwide, only seven remain. Thousands have had their medical coverage interrupted, causing out-of-pocket costs to rise and giving people trouble seeing the same doctors.

In Illinois, Ohio and Oregon, more than 90,000 people must find a new health plan, while those in Connecticut have until January before their co-op shuts down. Some in the Buckeye State have criticized Ohio Lt. Gov. Mary Taylor, a Republican, for not ending the state's co-op before 2016.

But Taylor, who directs Ohio's department of insurance, responded that acting prematurely would have been worse.

"You could be shutting them down unnecessarily," Taylor said. "You've got to be very thoughtful."

One major factor in the co-op failures is 'risk adjustment,' a segment of Obamacare that redistributes funds from insurers with healthy clients to those with more unhealthy clients. Slavitt's agency announced on June 30 the amount insurers would pay for risk adjustment, prompting co-ops in Illinois, Oregon and Connecticut to say they would close, citing the payments as a major factor.

The Detroit Free Press reports that health-care costs could rise about 17 percent in Michigan next year if state regulators let insurance companies increase rates as requested.

"We really try our hardest to keep coverage affordable, but some of the costs are very difficult to manage when you have pharmacy companies going out with 800 percent increases on the price of their drugs in a year," said Marti Lolli, Priority Health's senior vice president of commercial markets.

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A series of co-op failures is causing problems for thousands of Obamacare enrollees, leading some to question if regulators could have prevented the shutdowns.
obamacare, co-op, healthcare, coverage
346
2016-30-01
Monday, 01 August 2016 02:30 PM
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