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No official explanation for CO-OPs' struggles

HHS says it is exploring its options for how to fix program

Nearly half of the 23 consumer owned and operated plans have now announced they will shut down, and the Obama administration isn't providing much detail as to why, or what it plans to do to fix the CO-OP program.

CO-OPs operating in South CarolinaColorado, OregonTennesseeIowaKentuckyNevadaLouisiana and New York, and most recently, Utah, have shut down.

"Right now, that is what we are doing, is exploring our options," said Health and Human Services Secretary Sylvia Mathews Burwell, article from The Hill. "We are continuing to examine what, if any, options we have."

Overall, the national enrollment in CO-OPs has been low, but the closures will still affect many hundred thousand people. And a CO-OP's closure has at least one state worried about the future of its health insurance exchange, FierceHealthPayer has reported.

In a contributed article for Forbes, Ed Haislmaier, senior research fellow in health policy at the Heritage Foundation, cites poor CO-OP design, bad provisions that did not allow for non-profit growth, and the many changes the ACA imposed on individual and small group health insurance markets as possible reasons for such a high failure rate of the CO-OPs.

"Obamacare has made health insurance costlier and the business of offering it riskier," he writes. "To survive in that new world, health insurers need to be cautious, or even pessimistic, and hope that their customers can continue to pay escalating premiums."

It's unclear how the Obama administration plans to work with CO-OPs to ensure more don't fail, so some CO-OPs and small insurers have formed a coalition to push for changes to the ACA that they say are causing CO-OPs to struggle financially.

To learn more:
- read The Hill article
- read the Forbes article

Related Articles:
CO-OPs face uncertain financial future
As CO-OP closures continue, questions loom for state exchanges
OIG report finds CO-OPs underperformed, didn't reach enrollment goals
Struggling CO-OPs, small insurers form coalition to push for change