Official: 8 of 11 Remaining Obamacare Co-Ops on the Brink

Agency taking 'corrective action' to keep co-ops afloat

Dr. Mandy Cohen, chief of staff of the Centers for Medicare and Medicaid Services / AP
February 29, 2016

An official with the Centers for Medicare and Medicaid Services told lawmakers last week that eight of the 11 remaining Obamacare co-ops have been selected for "corrective action plans" and "enhanced oversight."

Twenty-three co-ops were created under the president’s health care overhaul, and so far more than half have collapsed and are no longer selling plans in the marketplace. The 12 co-ops that went out of business operated in Arizona, Michigan, Utah, Kentucky, New York, Nevada, Louisiana, Oregon, Colorado, Tennessee, South Carolina and a co-op serving Iowa and Nebraska.

The agency’s chief operating officer, Dr. Mandy Cohen, told the House Oversight and Government Reform committee that the 11 co-ops that remain are "being monitored closely," and that eight have a corrective action plan in place and are under enhanced oversight.

Cohen explained that a co-op is put on a corrective action plan when the agency identifies issues with its finances, operations, compliance, or management processes.

Rep. Buddy Carter (R., Ga.) asked Cohen about a Department of Health and Human Services inspector general report that found that all but one of the co-ops lost money in 2014.

"CMS was aware of this, that almost all of the co-ops incurred losses in 2014," Carter said. "If you were aware of that and some were already shutting down why did you continue to award the taxpayer dollars in loans?"

"We share your concerns here," Cohen said. "These programs certainly have challenges which is why we’ve been doing the extensive and aggressive oversight that we have."

Lawmakers asked Cohen which of the eight co-ops on corrective action plans was the most likely to fail, how many co-ops were still profitable, and how many were meeting enrollment projections.

Cohen told lawmakers she would follow up with specific details.

"Half of them are collapsed—closed—your term, costing the taxpayer over a billion dollars, of the [11] that are left you can’t tell me which ones you’ve visited or haven’t visited, what the enrollment projections are, and if they are meeting their enrollment projections—whether they are profitable or not," Rep. Jim Jordan (R., Ohio) said. "That’s the kind of stuff we wanted to know in this hearing."