By Jack Craver
The money is gone and it might never come back. That’s what some in the Obama administration fear about the more than $1 billion it poured into health insurance co-ops that failed
Although originally envisioned as an innovative tool to empower health consumers to bring down the cost of insurance, 12 of the 23 co-ops that were part of the PPACA individual marketplace have failed, mostly due to an inability to cover their members’ claims.
Critics of PPACA have held up the co-op failures as evidence of incompetence by the administration.
According to a report in the Wall Street Journal, just about everybody feels ripped off by the co-op fiasco, including many of the co-ops themselves.
For starters, doctors, hospitals and other providers complain that they have provided millions of dollars in services for which they were never reimbursed by the now-defunct insurers.
And of course, the Obama administration isn’t happy about the money it spent on a failed product. Officials tell the Journal that the administration is willing to take legal action to recover the funds.
But leaders of the 11 remaining co-ops say the feds’ efforts are in vain.
“In terms of collections, no. There’s nothing to collect,” Dr. Martin Hickey, head of the National Alliance of State Health Co-ops, told the Journal. “Will there be a little money left? Yeah, maybe.
also have accused the federal government of reneging on its commitment to support them, both by reducing the amount of startup loans available and by devising a flawed risk-adjustment formula, which is supposed to distribute money from plans with healthier members to those saddled with higher-cost ones.
In fact, an Oregon co-op that was forced to close is planning a lawsuit against the federal government and could be joined by other co-ops. The suit alleges that the administration owes the defunct insurers more than $5 billion in risk corridor payments.
Originally posted on BenefitsPro.com