A critical component of ObamaCare is falling apart before our eyes and the Obama administration is limit the damage by offering the failing entities loans that will probably never be paid back.
ObamaCare created health care co-ops as alternative to the "public option" that liberals were demanding. The co-ops would receive federal loans and offer alternative plans that would, in the minds of the Jonathan Gruber's of the world, out compete private market companies. They haven't and in fact most are struggling to keep their heads above water.
Melissa Quinn at the Daily Signal reports "after receiving $2.5 billion in taxpayer dollars from the federal government, the vast majority of nonprofit insurance companies created under the Affordable Care Act recorded losses in revenue...The Daily Signal examined the latest quarterly filings for 22 of the 23 co-ops and found that just one was profitable last year. Data was not available for New Jersey’s co-op, Health Republic Insurance of New Jersey." The co-ops were created with $3.4 billion in federal loans and each has received an overage of $108 million.
Bloomberg News reports that the co-ops are "flirting with financial distress" as all but five have negative cash flow. CoOportunity Health, which serves Iowa and Nebraska, has already collapsed. The Iowa State Insurance Commissioner, Nick Gerhart, took over the failing CoOportunity Health in December and has already taken steps to liquidating it. As David Holberg notes, maybe we should look at the bright side: The $146 million in taxpayer dollars lost on CoOportunity Health is a bargain compared to the $536 million that went down the drain known as Solyndra!
Make no mistake about it, the White House will try to prop these co-ops up with more federal largess. Congress should pull the plug.
