Author Topic: Sebelius asked to explain $2B in Obamacare loans  (Read 239 times)

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Sebelius asked to explain $2B in Obamacare loans
« on: November 20, 2013, 11:26:16 PM »
Several leading GOP members of Congress are asking Health and Human Services Secretary Kathleen Sebelius, under whose watch the website rollout has experience one fiasco after another, to explain the $2 billion in taxpayer money loaned to various interests to get health insurance CO-OPs up and running – and whether the taxpayers will get any of that back.

Just when the Obamacare experience appears to be able to go no lower – the website malfunctions, millions of policies are canceled outright, only thousands are able to sign up via online offerings, prices for policies are skyrocketing, and more – come the questions about loans.

“Out of the $1.98 billion awarded to CO-OPs, what amount does HHS expect to be repaid? What is the period of time by which HHS expects these funds to be repaid?” were among the questions presented to Sebelius by Sen. Orrin Hatch, ranking member of the Senate Finance Committee; Sen. Lamar Alexander, ranking member of the Health, Education, Labor and Pensions Committee; Sen. Michael Enzi, ranking member of the Health, Education, Labor, and Pensions Subcommittee on Children and Families; Sen. Tom Coburn, ranking member of the Homeland Security and Government Affairs Committee; and Rep. Charles Boustany Jr., chairman of the House Ways and Means Committee on Oversight.

The letter noted it’s not the first time members of Congress have asked for information about the HHS program called Consumer Operated and Oriented Plans, which has been used to loan that massive sum of money to non-profit health insurance issuers that offer qualified health plans in the individual and small group markets.

Two dozen of those groups have been given the money, the members of Congress note, for startup costs and solvency, “which help CO-OPs meet state insurance solvency and reserve requirements.”

“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 … The responses to our letter from CMS 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 issue.”

The scanty information that was available was not reassuring, the members of Congress said.

An inspector general’s report, for instance, said “11 of 16 CO-OPs reported estimated startup expenditures … that exceeded the total startup funding ultimately provided,” producing a “risk that CO-OPs could exhaust all startup loan funding before they are fully operational or before they earn sufficient operating income to be self-supporting.”

They also note that at least one of the CO-OP plans was denied a license by the state of Vermont to operation.

With the letter today, the senators want to know whether the government, on behalf of the $2 billion in tax money, monitored licensing processes and how many have or have not been granted that status.

They also want to know when the plans will be operational, and will those plans be within budget?

They also ask for an explanation of those startup costs, what does the “problematic launch” of the website mean to the operations, have all the required reports been submitted, and are the operations meeting their required milestones.

“Please provide all documents related to (1) the Vermont CO-OP’s failure to obtain an insurance license and (2) HHS’s decision to terminate the Vermont CO-OP loan,” they ask.

Earlier this year, a number of Republican senators asked the Government Accountability Office to conduct an independent audit examining the effectiveness of CO-OPs. The members also requested GAO evaluate efforts by CO-Ops related to covering the uninsured, providing lower-cost plans, and repaying loans from the U.S. Department of Health and Human Services.


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