Administrators of not-for-profit health insurance co-ops told Congress that high claims, federal funding cuts and poor access to capital killed nearly half of the 23 state co-ops established under the Affordable Care Act.
James Donelon, Louisiana insurance commissioner, said his state’s co-op was meant to increase competition, but instead quickly found itself in a dire financial situation. He likened it to “learning how to sail in a hurricane.” John Morrison, vice chairman of the Montana Health Co-op, said Congress impeded the success of the co-ops by capping government loans, restricting the use of private capital and not allowing enrollment limits in the first year. Dr. Mandy Cohen, CMS chief operating officer, said the first priority for closing co-ops is to pay out claims and find new coverage for consumers. Then the agency will find ways to recoup the co-op’s loans.