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Obamacare Is A Disaster: Co-Op Insurers Across America Are Collapsing, And Now There Is Fraud
Two weeks ago we reported that in what at the time was still a rather isolated incident, Colorado's largest nonprofit health insurer (aka co-op), Colorado HealthOP is abruptly shutting down, forcing 80,000 Coloradans to find a new insurer for 2016.
At the time, we said that the health insurer had been decertified by the Division of Insurance as an eligible insurance company because the cooperative relied on federal support, and federal authorities announced last month they wouldn't be able to pay most of what they owed in a program designed to help health insurance co-ops get established.
In other words, one of the 24 co-ops funded with Federal dollars and created to give more policyholders control over their insurers - especially those who wished to stay away from various corporate offerings, had failed simply because the government was unable to subsidize it: the same government that spends $35 billion in global economic "aid" but can't support its most important welfare program.
Fast forward to today, when we learn that another co-op, this time New York's Health Republic Insurance - the largest of the nonprofit cooperatives created under the Affordable Care Act - is not only shuttering, but was engaging in fraud.
The fate of Health Republic Insurance was first revealed a month ago when the WSJ reported it would shut down after suffering massive losses "in the latest sign of the financial pressures facing many insurers that participated in the law’s new marketplaces."
The insurer lost about $52.7 million in the first six months of this year, on top of a $77.5 million loss in 2014, according to regulatory filings. The move to wind down its operations was made jointly by officials from the federal Centers for Medicare & Medicaid Services; New York’s state insurance exchange, known as New York State of Health; and the New York State Department of Financial Services.
In a statement, Health Republic said it was “deeply disappointed” by the outcome, and pointed to “challenges placed on us by the structure of the CO-OP program.”
Health Republic has about 215,000 members, with about half holding individual plans and half under small-business coverage, a spokesman for the insurer said.
Today we learn that not only was this largest Co-op insolvent, it had also committed fraud. According to Politico, the collapsing insurance company that is creating headaches for hundreds of thousands of New Yorkers, misled state and federal officials about its finances, and will not be able to remain in business through the end of the year as originally hoped.
Because incompetence is one thing, but corruption: now that's real government work, right there.
The accelerated wind down is clearly a problem: the more than 200,000 customers insured with the co-op will lose their coverage Dec. 1, and must find a new plan by mid-November, according to the state and federal government. Health Republic insures about 20 percent of the state's individual market.
As Politico adds, the plan had been for Health Republic to make it through the end of the year. As recently as last week, company officials said there was enough in cash in reserve. But that apparently wasn't true.
Health Republic's finances are "substantially worse than the company previously reported in its filings," according to the state Department of Financial Services, which oversees insurance in New York, and the Centers for Medicare and Medicaid Services.
One wonders just how much of the over $100 million "lost" in under two years was due to incompetence, and how much due to pure embezzlement by the co-ops operators. Somehow we doubt we will find the anwer where this taxpayer money has gone.
This does, however, lead to a more serious question: the implosion of Health Republic is merely the latest in what has become an epidemic of governmental failure. In fact, there are a total of ten co-ops, all of which were created by the Affordable Care Act and seeded with billions in federal funding, that have now failed, leading to questions whether the entire business model underpinning Obamacare is unsustainanble for everyone but a select few corporations.
For some more thoughts on this disturbing, if perfectly predictable epidemic, we go to Forbes' Edmund Haislmaier who answers "Why Obamacare Co-Ops are failing at a rate of nearly 50%"
Cooperative health insurers (or co-ops) created under a federal grant and loan program in the Affordable Care Act seem to be falling like dominoes.
It started in February, when CoOportunity Health, which operated in Iowa and Nebraska, was ordered into liquidation. In July, Louisiana’s insurance department announced it was shuttering that state’s co-op. The following month brought news that Nevada’s co-op would also close. On September 25, New York ordered the shutdown of Health Republic Insurance of New York, which had the largest enrollment of all of the co-ops. Then, within the space of a week in mid-October, the number of failures doubled from four to eight, as state insurance regulators announced that they were closing the co-ops in Kentucky, Tennessee, Colorado, and one of the two in Oregon. Last week came news that South Carolina’s co-op will be closed, followed this week by the announcement that Utah’s co-op is also being shut down.
In sum, of the 24 Obamacare co-ops funded with federal tax dollars, one (Vermont’s) never got approval to sell coverage, a second (CoOportunity) has already been wound down, and nine more will terminate at the end of this year.
So what is behind this, so far, 46 percent failure rate?
To start with, the program was a congressional exercise in not merely reinventing the wheel, but doing a bad job of it.
Far from being a new idea, member-owned insurance companies—called “mutual” insurers—have a long history. For instance, life insurer Northwestern Mutual has been in business for over 150 years. Health insurers organized as mutual companies include, among others, Blue Cross plans in 10 states. Indeed, one of them, Florida Blue, converted into a policyholder-owned mutual company just last year. If having more health insurers owned by their policyholders was the goal, then there was no need for federal government action.
On the other hand, if the goal was to increase competition by stimulating the creation of new health insurers, then the ACA’s co-op program was, like other parts of the legislation, badly designed.
* * *
The program offered federal loans and grants to startup insurers but required that they be non-profits, not have anyone affiliated with an existing health insurer on their boards, and not spend any of their federal funding on marketing.
Co-ops are also subject to another provision of the ACA requiring all health insurers to pay out in claims at least 80 percent of premium revenues, or refund the difference to policyholders. By law, insurers can retain no more than 20 percent , out of which they must fund sales and administrative costs before booking any remainder as free cash. That significantly constrains a non-profit carrier’s ability to accumulate capital needed for growth, as it can’t raise funds through equity or debt offerings.
As if that wasn’t daunting enough, the law also required co-ops to focus “substantially all” of their activities on offering health insurance in the individual and small group markets—just as other provisions of Obamacare were thoroughly disrupting those markets by imposing new rules on insurers and complicated new payment arrangements for many of their customers.
Given all of the foregoing, 10 co-ops failing within two years is less surprising than the fact that 23 of them actually got to market in the first place.
As we pointed out two weeks ago, following this avalanche of failures, it will merely force even more individuals into plans offered by corporations, who as a result of the failure of their co-op competitors will have even more pricing power and premium hiking leverage.
Which means that "sticker shockers" such as the one below kindly informing them their health insurance premiums are rising by 60% crushing any desire to splurge modest "gas savings" on discretionary purchases...
... will only get worse, as the premium increase even more with every passing year, as more Co-Ops fail, as more of the publicly-held insurers merge, and as a single-payer system, one which benefits not taxpayers but a select handful of shareholders, becomes the norm.
Haislmaier's take: "The bottom line: Obamacare has made health insurance costlier and the business of offering it riskier. To survive in that new world, health insurers need to be cautious, or even pessimistic, and hope that their customers can continue to pay escalating premiums. It’s not a pretty picture."
It isn't but what are customers going to do: after all the "Affordable Care Act" is a tax (one which "boosts" GDP every quarter no less) and you must pay it by law; sadly the Supreme Court forgot that when it makes a service mandatory, corporations can charge any price they want.
And that's precisely what they are doing.
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ISIS soldiers are happy and healthy .... because, killing people you really hate .... reduces stress and cortisone levels ?
Yes Health Insurance sucks, I pay $150 a month and for that I get complete cover including dental, crowns, root canals etc, although I only get back about 80% of my dental and costs such as glasses,( two pairs only a year) I get about half of my doctors visits back, but admittedly I could go to a free doctor instead, if I have to go into a private hospital for an op, I pay $500 up front and everything else is covered, surgeon, drugs, operating theater, private room etc....actually now I type it all out, maybe I'm not so bad off......but I'm not in that bastion of Freedom and democracy the good old US of A.
Dear Aussie Donkey,
Don't gloat. We have plans for your nation. As we destroyed the once great America, yours too will be destroyed. We have inserted one of our own to lead your nation and you shall look to Calcutta as to what he has in store for you.
The Elders of Zion
Everyone wants a polished non threatening black hope to spout all the government canned responses to all the satanic questions, so they feel good.
i got a black figure to vote for
Maserati xxx
At least if i have to hear endless lies i can stare at some outrageously giant tits while i get my daily lies.
https://www.youtube.com/watch?v=3GPGcP7-FfQ
That sounds like fraudulent fraud.
There warning signs are all around us of a medical system/government that is out of control. So as a retiree I look at personal/direct costs to see if our US medical juggernaut is out of control. Here is some of what I found out:
1.Recent Business Example – I bought a wood stove insert for my fireplace yesterday. During the order write up the owner said me “...can you believe it my grandfather policy lapsed under 2.Obamacare and my insurance is going from $600 a month to $1100. And those high deductibles and high co-payments cal services and prescription drugs before they reach the cap on out-of-pocket costs are killing me ...”
3.Recent Personal Example –My wife has MS and takes shots every other day. We strain at our high insurance costs, but it could be worse. Under Obama her Betaseron has gone from $1100 to $5500 last month and now $5800 this month (Obama allows drug companies to rape the government). If my insurance goes under I will be bankrupted quickly.
4. Old Family Example – My daughter got her hours cut back at her job from 40 to 30 when this happened she no longer qualified for full medical care policy. She is still looking for a full time job and was forced unto Medicaid.
5.Older Family Example – My brother had his one of a kind business insurance cancelled for his small business under Obamacare. The cheapest replacement policy doubled his medical cost, which caused his business to raise costs or go under.
So…to our polite elite….my wishes for the coming Holiday season are…go to hell…
I second the motion. Elite go to hell squared.
The USSA operates as a Crime Syndicate - with El Presidente there to give the "Seal of Legitimacy" to its operations.
The scam of "Obamacare" is Medical Fraud within a Financial Rip-off presented as Progress - emanating from the Pharma/Insurance arms of this crime syndicate. And still the people take it.
healthcare is fucked, obama is a thief
Dear Donkeys,
Non profit healthcare in the Affordable Care Act. Ah, what material we create. The oxymorons are multidimensional.
First off, non-profit goes against the talmud, especially when it relates to us fleecing the goyem for every last penny before we send you to your premature grave.
Healthcare! Ha. That's one of our finest. You do know that we created the AMA and believe me they have nothing at all to do with health. Our financial health perhaps, but certainly not your physical health.
And our latest zinger, Affordable Care Act. We still get belly laughs over this one. Certainly was never designed to be affordable, and believe us when we say that there is no care involved at all.
The Elders of Zion
Need to bust big pharma to get the cost of medicines under control. India has legislation on generic drugs "for the health of the nation" patents are stuffed.
Start there then after that it really is about an hourly rate of being treated and that you can compare to labor costs in general.
With a proper hammering of those two you have a chance of providing affordable healthcare, without it forget it. It is all well and good government forcing you even if you are healthy to take out medical cover but if you cannot afford food and housing then it legislates to feed others while you starve.
Obamacare was always going to fail because it looked to the paristical corporation for the legislation and now you tell me one banker that will pass legislation to make themselves poorer ... the same concept for medical insurance companies and healthcare legislation.
Joe Biden was right....this is a big fucking deal....
Medicare operates with 3% overhead, non-profit insurance 16% overhead, and private (for-profit) insurance 26% overhead. Source: Journal of American Medicine 2007. Gee, Ayn Rand told me that private enterprise is always the most efficent way to run a society.
That's right. More efficient at putting money in the pockets of the 1%.
Downvotes from people who don't like facts.
Really??
"Now There IS Fraud"
the whole fucking thing was fraud from day one, when we got it shoved up our ass in the middle of the night as the multi million dollar bribes were passed around to congress.
It was a merrry xmas for congress that year. The rest of us got butt plugs in our stockings.
Yeah, our corrupt president likes his dealings done during the night. How fitting that his presidency looks to be ending with economic collapse and world war.
Use proceeds from Planned Parenthood's lucrative baby parts biz .... to bridge the spending gap ?
A Modest Proposal
Single Payer. I'm a U.S. citizen currently residing in Canada--which has single-payer healthcare.
My wife and I pay a total of about $8000/yr hidden in federal and provincial taxes for single-payer healthcare. Worse, since the system is constantly threatening to bankrupt the province, it must periodically de-list services. This means that various blood tests, for example, now must be paid for in cash up front.
In addition to the taxation, my wife and I must pay about $2000 per year for private extended health coverage for services the government has delisted.
It is true that seniors have prescription drugs covered by the gov, but certainly not all of them.
Meanwhile. for state-of-the art treatments for rare and serious diseases, the program will not cover them. So the victim and family must a) get treatment in The U.S. b) pay for it.
Suppose I need an MRI. I could travel to my S.C. U.S. residence, walk in , get an MRI, pay a reasonable fee for it, get back to Ont. and still have to wait weeks for a Canadian MRI.
I got an eye exam at the VA clinic ..... I asked for glass lenses .... no, no, no .... don't run with glass lenses .... my plastic lenses will come in the mail in 6 weeks .... cost to taxpayer $500 (?) .... in Tijuana I can get glass glasses .... while you wait .... $50 .... lab is in back of clinic .... tourists don't like to come back in 6 weeks ?
Judge Roberts must have a cute little boy in some closet
Personally, I'm leaning toward death threats to his family from the Clinton killing machine. But hey, that's just me.
They definitely got the goods on Roberts, or he got "the call" the night before the vote on this steaming pile of government shit. Death to all government programs.
This was a complex scheme, even in its passage. Think about it: not one Republican voted for it, which set up the dynamic of opposition that both parties have milked for years, while the insurance companies milk the rest of us for as long as they can.
Sure kept up the appearance of the one party being two, until the facade faded before the reality, huh?
All we are is sacrificial cows to these people.
There is no longer such a thing as health "insurance." Insurance is a hedge against risk, real and perceived. It is specifically a hedge against unacceptable risk. Obamacare removes the assessment of risk, therefore there is no insurance. All that remains are benefits.
I work in a community clinic, they provide a health plan. Most of the people working here are women . . .specifically young women, child-bearing-years type of women. Many are up-front about their reason for working here: the benefits.
Annually, we vote on a new health plan. Of course, the majority women vote their interests. Our plan includes disability benefits for pregnancy. The extra coverage can be added at any time . . .and it is, the moment the female worker discovers she is pregnant.
We experience the same triple-digit annual increases in premiums as everyone else, with a letter from the insurance carrier which invariably says something akin to "once again, we paid out more in benefits than we received in premiums, therefore . . ."
Let the death spiral begin.
DSTY,
It gets annoying having to refute nonsense Hazbara troll schlock.
Russia can afford its universal health care. Are Russian's being harvested with high medical costs, as in America? The destruction by high costs in America far exceeds any perceived quality benefits. For example, it is difficult to form new small business when entry costs for labor are so high. Labor costs are excessive due to all kinds of rents, including way excessive medical costs.
Below is a video that shows Crimean "elders" queing up to receive their Russian national health insurance. Also, watch the whole video to disabuse yourself of the notion that Crimea was "stolen" when in fact the people there wanted Crimea to return to its homeland. The elders seem quite pleased, in fact estatic, to be returning to the Russian Federation.
Slav's are running Russia now, not Bolsheveiks.
https://www.youtube.com/watch?v=W1zvb_ottiw
Three minutes and 50 seconds into video to see interview.
Be careful of HSA, Health Savings Accounts...enter the Optum/United Healthcare bank. Not only will they give you a MasterCard to empty it out and mine and sell all the data from the transactions, but now when you hit $2100.00 in your account, they want you to move some of it over into Mutua Funds.
This bank has over $2 billion on deposit and makes loans with the money as well. How low can you go.
Most don't even know United Healthcare/Optum operates a full on custodial bank! They also offer Wealth Management to cover that $2100 investment, but it's not FDIC insured anymore if you move money to Mutual Bonds of course.
http://ducknetweb.blogspot.com/2015/10/united-healthcare-owns-bank-optum-bank.html
"Obamacare is a Disaster"
Is it right to call it a "disaster" when it's functioning exactly as intended?