Politicians point fingers as more CO-OPs fail
More than half of the originally established consumer operated and oriented plans (CO-OPs) now have failed, a situation that appears to have set off a blame game among government officials.
With Michigan now added to the growing list of failed CO-OPs, this means that approximately 740,000 individuals and small business employees will have to choose new health plans for 2016, according to the Washington Post. During a House Ways and Means Committee hearing Tuesday on the subject, Republicans and Democrats laid the blame on one another for the startups' struggles.
Republicans say that the CO-OP program reveals the problems with the government backing certain businesses for political purposes, according to the Associated Press, and the Democrats claim that funding cuts forced by the GOP made the problem worse and contributed to the instability of CO-OP finances.
Despite the failures, Mandy Cohen, a senior official with the Department of Health and Human Services, told lawmakers at the hearing that CO-OPs have played a vital role in creating competition and choice in the law's health insurance markets.
"Any start-up faces the inherent risks of building a business from the ground up," Cohen said in her testimony.
When asked about negligence from federal officials, Cohen said that federal officials were not negligent when supervising the CO-OPs, but that Congress restricted the administration's ability to help insurers with unexpectedly large costs, according to the New York Times. Additionally, she said, Congress cut the original $6 billion CO-OP budget to $2.8 billion.
Officials have struggled to understand what is causing the CO-OP failures, and the shuttering of one state's CO-OP has left lawmakers worried about the future of its exchange. Additionally, the the CO-OPs' struggles have taken center stage in political races.