In his opening statement, Sen. Rob Portman (R-Ohio), chair of the Senate Permanent Subcommittee on Investigations, placed the blame for the poor performance of the Consumer Operated and Oriented Plan (CO-OP) Program squarely on HHS’ “bad decisions.” The statement, which kicked off the Subcommittee’s hearing titled “Review of the Affordable Care Act Health Insurance CO-OP Program,” said that HHS ignored serious problems, delayed corrective action, and continued to approve loans to failing—now failed—CO-OPs. Much of the hearing was based on the content of a Majority Staff Report finding that HHS failed to exercise good stewardship of public money in funding the program.
Section 1322 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) requires the HHS Secretary to establish the CO-OP program, a network of non-profit health insurance providers to compete with private insurers in the individual and small-group markets. The ACA also authorizes HHS to issue low-interest loans to CO-OPs to assist with the establishment and maintenance of plans. A July 2015 report from the HHS Office of Inspector General (OIG) indicated that most CO-OPs did not meet program enrollment and profitability projections as of December 31, 2014 (see Most ACA CO-OPs not meeting goals, August 5, 2015). Before open enrollment for 2016 began, 12 of the original 23 CO-OPs closed or were ordered to shut down:
- CoOportunity Health, serving Nebraska and Iowa (see Co-op failure blame game: Grassley demands answers, January 21, 2015);
- Louisiana Health Cooperative (see Louisiana CO-OP fails; Commissioner blames ‘onerous Obamacare’, July 29, 2015);
- Nevada Health CO-OP (see And another one gone, Nevada’s co-op bites the dust, September 2, 2015);
- Health Republic Insurance of New York (see And then there were 19: New York CO-OP the latest to shut down, September 30, 2015);
- Kentucky Health Cooperative, Tennessee’s Community Health Alliance Mutual Insurance Company, Colorado Health Insurance Cooperative, and Oregon’s Health Republic Insurance Company (see Timber! Four more CO-OPs go down, October 21, 2015);
- South Carolina’s Consumers’ Choice Health Insurance Company (see Dropping like flies: South Carolina CO-OP closing, October 28, 2015); and
- Utah’s Arches Health Plan, Arizona’s Meritus, and Consumers Mutual Insurance of Michigan (see CO-OPs collapse in Utah, Arizona, Michigan; Senate committee asks who will pay, November 4, 2015).
The Permanent Subcommittee on Investigations hearing listened to testimony from CMS Acting Administrator Andy Slavitt and Marketplace CEO and Deputy Administrator Kevin Counihan. The CMS officials touted the important role played by CO-OPs in providing affordable health insurance options. They explained that before providing additional funding to CO-OPs, the agency undertook a rigorous review process, and further reminded the Subcommittee that Congress made “substantial rescissions” from the program’s initial funding.
Legislation: CongressionalHearings NewsFeed AgencyNews GeneralNews InsurerNews
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