Watchdog: Accountability

Obamacare's 'rocky start' adversely affecting start-up health co-ops

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Politics,Watchdog,Richard Pollock,Obamacare,Health Care,Accountability,Healthcare.gov,Health Care Exchanges

Obamacare's "very rocky start" on its health care exchanges has hurt many federally financed health care co-ops, a co-op trade association leader plans to tell Congress on Wednesday.

Janice S. VanRiper, the executive director of the National Alliance of State Health Co-ops, is giving the first insider's glimpse into the federal government's ambitious experiment to finance nonprofit health insurance cooperatives and have them compete with private health insurance companies.

In prepared testimony, VanRiper said that the early collapse of healthcare.gov, the federal health care exchange website, and problems afflicting many state-run exchange websites have depressed enrollment in the co-ops.

“Although some co-ops have already been able to drive high enrollment numbers due to unique conditions in their states, others have had a more difficult time,” said VanRiper, who is slated to speak to two House subcommittees that operate under the House Oversight and Government Reform Committee.

VanRiper did not elaborate in her prepared remarks about how the botched healthcare.gov rollout affected the co-ops. But of the 23 co-ops now in operation, she reported, “most co-ops have had to revise their original plans in response to these changes,” and she said many are “challenged.”

The Department of Health and Human Services last year awarded more than $2 billion in tax-free, low-cost loans to 24 co-op startups.

Financial and enrollment trouble for the co-ops could lead to default, which ultimately would be covered by taxpayers.

Vermont's insurance commissioner last year prohibited the co-op in that state from operating due to a questionable financial plan and allegations its president, Mitchell Fleischer, stood to benefit from the co-op's activities. Fleischer, who resigned after the commissioner criticized the deal, is also scheduled to testify before the House subcommittees Wednesday.

Also testifying is Sara Horowitz, who created co-ops in New York, New Jersey and Oregon. A friend and former colleague of President Obama when he was an Illinois state senator, Horowitz received $345 million from HHS, the single largest federal loan to any of the co-op startups.

Although HHS has released overall enrollment figures for the health exchanges, the agency has not listed actual enrollment figures for each of the 23 operating co-ops.

VanRiper's testimony hailed as successes the Maine co-op, which has hit 80 percent of its target enrollment; Wisconsin's co-op, which has exceeded its enrollment by 110 percent; and the Iowa/Nebraska startup, which has four times its predicted membership. VanRiper did not specify how many of the startups are off to a bad start.

Connecticut's HealthyCT co-op reported that as of Jan. 16, it had enrolled only three percent of the exchange enrollees, according to CTNewsJunkie.com.

In Maryland, where the state website has been malfunctioning since its start last October, the co-op reported only 200 enrollees, WebMD reported Jan. 5.

VanRiper did not provide any numbers for the two co-ops that operate in Oregon, where the state health care website has never worked properly. In early January, the state’s exchange director announced his resignation.

VanRiper's testimony also did not address the age of the co-ops' enrollees. Like the health care exchanges, signing up younger and healthier policyholders is vital to the co-ops' financial success.

In Maine, for example, where VanRiper said the co-op met 80 percent of its target goal, most enrollees in the state health exchanges are middle-aged or older, according to a Jan. 14 Portland Press Herald report.

Meanwhile, the Nevada co-op has been accused of misleading consumers by providing lists of doctors and hospitals that were not part of its provider network.

Washington Examiner staff writer Logan Porter contributed to this story.

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