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Why as CO-OPs failed, government failed to act

Partisan fights over ACA, budget cuts hastened insurers' decline

The decline of the Affordable Care Act's consumer operated and oriented plans can be traced to a series of policy decisions that hampered them from the start--as well as inaction from the government when it was clear the CO-OPs were in trouble, the National Journal reports.

So far, more than half of the 23 CO-OPs have either shuttered or started to wind down operations, and while there are a few success stories, most have failed to reach their enrollment and financial goals as of the end of last year. Yet at a recent hearing, a Department of Health and Human Services (HHS) official denied that the government was negligent in its oversight of the CO-OPs, pointing out that Congress had slashed the nonprofit startups' original $6 billion budget considerably, FierceHealthPayer reported.

The CO-OPs also took a hit when insurers were allowed to hold off canceling non-ACA-compliant plans until 2016, which may have kept some healthier and higher-income customers off the exchanges, the National Journal points out. Another blow came when insurers learned they would only get 12.6 percent of what they were owed through the risk corridor program, which was intended to make operating on the exchanges less financially risky.

Even before the string of CO-OP closings, though, some lawmakers saw trouble coming. Sen. Orrin Hatch (R-Utah), and several other lawmakers detailed their concerns in a letter sent to HHS in 2013, but the Obama administration took no action, Hatch told the National Journal. He added that it is difficult to amend parts of the ACA because "Democrats treat it like a scripture."

Democrats like Michigan Sen. Debbie Stabenow, on the other hand, contend that Republicans' preoccupation with repealing the ACA keeps Congress from addressing real issues associated with the law. So with finger-pointing and gridlock on both sides, struggling CO-OPs were left to "spin their wheels," according to the article.

Still, the recent bipartisan effort to change the ACA's expansion of the small-group market may provide a template for future fixes to the law.

To learn more:
- read the article

Related Articles:
Politicians point fingers as more CO-OPs fail
Struggling CO-OPs, small insurers form coalition to push for change
As CO-OP closures continue, questions loom for state exchanges
OIG report finds CO-OPs underperformed, didn't reach enrollment goals
PACE could be a template for more ACA changes