Obamacare co-ops fared poorly as they tried to sell health insurance in exchanges
By Richard Pollock | June 13, 2014 | 6:00 am
Sixty percent of the experimental health insurance co-ops funded under Obamacare failed to meet their original enrollment targets, according to a congressional analysis.
The congressional data shows that 14 of 23 federally underwritten health co-ops failed to meet their original enrollment targets by wide margins. Thirteen of the 14 missed enrollment targets by half.
Of the eight million people who enrolled in Obamacare, only five percent enrolled in a co-op.
The enrollment targets were set by Deloitte, a consulting firm retained by the Centers for Medicare and Medicaid Services to advise federal officials on the co-op program.
Underscoring the low enrollment numbers, 10 of the co-ops enrolled fewer than 3,600 customers in high-population states such as New Jersey, Ohio, Michigan, Illinois, Maryland, Massachusetts and Arizona.
The data, obtained from each co-op by the House Committee on Oversight and Government Reform, suggests that most of the nonprofits fared poorly as they attempted to sell health insurance policies in the federal Obamacare exchanges.
“Enrollment figures to date raise serious questions about how these co-ops plan on staying solvent and that taxpayers will ever be repaid," Oversight Chairman Darrell Issa, R-Calif., said in a statement to the Washington Examiner.
The enrollment outcome did not improve when, last year, Deloitte lowered the co-op enrollment goals. Eight co-ops failed to meet even 10 percent of the revised enrollment targets.
Only nine co-ops met or exceeded the original enrollment goals.
Under a $2 billion program set up in 2012, CMS officials awarded 23 nonprofits between $57 million and $160 million each to compete with traditional commercial insurers.
If any co-op fails and defaults on its federal loans, taxpayers will have pay for its insolvency. A White House report by the Office of Management and Budget projected up to four out of 10 co-ops could eventually face insolvency.
The House committee also estimated that the public cost for the enrolling co-op customers was often immense, as high the $207,000-per-person expense in Tennessee. There, the Community Health Alliance Mutual Insurance Co. received $73 million in loans but was able to enroll only 354 people.
Minuteman Health in liberal Massachusetts received the second-largest loan, $156 million, but was able to enroll only 1,435 customers at a cost of $109,000 per enrollee.
The data show that 11 co-ops spent between $17,000 to $207,000 to enroll members.
Grace Marie-Turner, president of the Galen Institute, a free-market think tank critical of Obamacare, said she was not surprised by the low turnout.
“Clearly they are not competitive. If they would be, they would have gotten a bigger share of the enrollment,” she told the Examiner.
Six co-ops operating in New York, Maine, Wisconsin, Utah, South Carolina, and Iowa and Nebraska far exceeded projections, however. Health Republic of New York reported 112,000 enrollments when Deloitte estimated only 18,000 would enroll. Deloitte estimated 11,000 would enroll in Iowa and Nebraska, but Co-Opportunity Health signed up nearly 77,000 people.
The nascent co-op movement was happy with the initial results. Martin Hickey, chairman of the state co-ops' trade association, said his group was "thrilled with our member co-ops’ initial first-year enrollment figures.”http://washingtonexaminer.com/obamacare-co-ops-fared-poorly-as-they-tried-to-sell-health-insurance-in-exchanges/article/2549688