Six of the seven Obamacare co-ops that are still in operation are currently on corrective action plans, according to an official from the Centers for Medicare and Medicaid Services.
The Illinois Department of Insurance announced this week that it was requesting an order of rehabilitation for the state’s Land of Lincoln Health co-op because of its unsustainable financial position. The co-op was originally awarded $160.2 million by CMS.
This closing announcement has brought the number of failed co-ops from 15, which was reported earlier this week, to 16.
Kevin Counihan, a top official for the Centers for Medicare and Medicaid services, told lawmakers on Wednesday that of the seven co-ops that are still in operation, six have been placed on corrective action plans. Co-ops are flagged for these plans when the agency has identified issues with the co-ops finances, operations, compliance or management processes.
The official was asked how many of the co-ops that are still in operation are profitable and he could not say. 'Profitability very much can depend on the month," Counihan said.
Rep. Jim Jordan (R., Ohio), who predicts that all 23 co-ops that were created will eventually fail, asked the official whether he thought it would be a complete failure if every co-op went out of business.
'Would it be a complete failure if every single co-op you guys authorized just two years ago failed?" Jordan asked. 'We all know that’s where it’s headed—16 have already failed, the seven left, six are on corrective action plans, they’re going to fail too so when all 23 fail would that be a complete failure?"
Counihan stonewalled and would not directly respond to the question.
'I think it underscores how tough this business is," he said.
'It seems by definition if 23 out of 23 fail, you should be able to say that of course by definition is a complete failure," Jordan responded.
'The co-op program has provided more choice, it’s provided more competition," Counihan said. 'It’s helped consumers in a variety of different states, given them opportunities that they may have not had before."
The official could not assure lawmakers that the seven co-ops that are still in operation will not fail.
'Are you going to assure me that the seven left that they are not going to fail, those seven are going to keep working?" Jordan asked.
'Nobody could make that kind of prediction," Counihan said.
The failed co-op in Illinois joins the 15 other co-ops that have failed including two in Oregon, one each in Connecticut, Arizona, Colorado, Kentucky, Michigan, Nevada, New York, Ohio, South Carolina, Tennessee, Louisiana, and Utah, as well as a co-op that served both Iowa and Nebraska.
Published under: Obamacare