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CO-OP fallout: Failures become political battleground

In Kentucky, CO-OP shutdown factors into governor race

The recent shutdown of nine consumer operated and oriented plans (CO-OPs) established under the Affordable Care Act has officials on both sides of the political spectrum pointing fingers. And in Kentucky, the failure of that state's CO-OP has become a hot-button issue in a tight gubernatorial race.

Some experts say the state-based nonprofit insurers that offer plans on the ACA exchanges were doomed from the start because of government actions that made financial survival difficult, according to the New York Times. Of the 23 CO-OPs created by the ACA, those operating in South Carolina, Colorado, OregonTennesseeIowaKentuckyNevadaLouisiana and New York have shut down. Some of them made the decision to close in recent weeks based on the federal government's decision to pay insurers just 12.6 percent of their requested risk corridor funding, which would have helped them cover their financial risk.

Yet former North Dakota Senator Kent Conrad, a Democrat who supported the CO-OPs, says the startup insurers were "sabotaged" by opponents including Republicans and competing insurance companies, the Times reports.

Meanwhile, debate over the CO-OPs' failure is taking center stage in the Kentucky governor's race after Kentucky Health Cooperative--which served roughly 60 percent of enrollees on the state's exchange--announced earlier this month it would close, Politico reports. Gubernatorial candidate Matt Bevin, a Republican, called the CO-OP collapse a "financial debacle that is a direct result of Obamacare." Yet Attorney General Jack Conway, the Democrat in the race, says the failure was the result of market forces and that Kentucky consumers still have more choices for health insurance under the ACA.

To learn more:
- read the New York Times report
- check out the Politico report

Related Articles:
South Carolina CO-OP becomes ninth to shut down
Struggling CO-OPs, small insurers form coalition to push for change
Some insurers will take hit from risk corridor program shortfall
OIG report finds CO-OPs underperformed, didn't reach enrollment goals
Kentucky CO-OP's demise not likely to be the last
Execs well-paid even as CO-OPs struggle