Adam Crain

When Warnings Go Ignored

March 15, 2016

Adam Crain

Central to President Obama’s Affordable Care Act is the creation of non-profit healthcare co-ops which would, theoretically, increase competition among insurance companies while driving the cost of insurance policies down.

In total, the Obama Administration doled out $2.4 billion in loans to create 23 co-ops. Since their creation, 12 co-ops in 13 states have closed their doors, costing the taxpayer $1.2 billion and leaving over 700,000 Americans without the healthcare coverage they were promised. In South Carolina, the closing of Consumer’s Choice Health Insurance Company in late 2015 meant that nearly 70,000 South Carolinians were forced to once again change coverage.  (Remember that long-ago promise that if you like your plan, you can keep it?)

Moreover, Melissa Quinn, a news reporter for the Daily Signal, chronicles a report by the Senate Permanent Committee on Investigations that says the Obama administration was warned about the financial woes of these co-ops and created them anyway. In her article, Warning Signs about Failed Co-Ops Ignored by Obama Administration, Senate Report Says, she writes:

“According to the study from Republicans on the Senate Permanent Subcommittee on Investigations, Deloitte Consulting evaluated loan applications and business plans submitted by a dozen now defunct co-ops and expressed concerns about their financial future.

The company, hired to evaluate the co-ops’ business plans and loan applications, specifically pointed to issues with the financial forecasts submitted by the nonprofit insurance companies. The consulting firm’s warnings were ignored by the Department of Health and Human Services, according to the subcommittee’s report.

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‘These failed co-ops were a costly experiment gone wrong, and real people got hurt, including the more than 700,000 Americans who lost their health plans,’ Sen. Rob Portman, chairman of the subcommittee, said today at a hearing on the co-ops.

Of those co-ops that have gone under, Deloitte identified issues with the enrollment strategy of seven. Such issues determined by the consulting firm included inadequate statistical analysis and inadequate knowledge of the customers each of those co-ops was looking to enroll.

Deloitte also found that 10 of the 12 failed co-ops had incomplete budgets that, among other issues, were misaligned with their own financial projections.”

With news such as this, South Carolinians are left to wonder which is worse? The fact that nearly 70,000 South Carolinians lost their healthcare coverage of choice because of the failures of ObamaCare, or the fact that the Obama administration was warned that Consumer’s Choice Health Insurance Company might fail and spent taxpayer money to set it up anyway.