Ominous signs are proliferating among 22 Obamacare health insurance co-ops of imminent financial collapses that could leave more than a million Americans without coverage, according to a Daily Caller News Foundation Investigative Group analysis.
All but one of the federally funded co-ops are experiencing accelerating net losses. President Obama’s signature health care reform program established the co-ops to provide non-profit competition to private sector health insurance providers.
Many of the 22 co-ops could soon follow an Obamacare co-op that defaulted earlier this year, suffering $163 million in operating losses in a single year. That collapse left 120,000 customers without coverage on Christmas Eve.
“We’re certainly going to have fewer co-op’s by the end of the year,” Thomas Miller, a resident health care fellow at the American Enterprise Institute think tank, told DCNF.
New figures compiled by Miller and Marie-Grace Turner, president of the Galen Institute, show that net losses for the co-ops reached a record $614 million in 2014. Both AEI and Galen are Obamacare critics.
The figure is nearly three times the $234 million in losses suffered through the first three quarters of 2014 as reported by Standards & Poor’s in a February 2015 report. It means that the burn rate for the experimental Obamacare co-ops is quickening.
“All but one of the co-ops,” S&P noted, “reported negative net income through the first three quarters of 2014.”
Insurance ratings firm A.M. Best also warned in January that as of September 30, 2014, “the ratio of surplus notes outstanding to capital and surplus exceeded 100% for all of the co-ops.”
Arizona’s Meritus Mutual Health Partners co-op has long-term loans that are nearly 1,000 percent of the value of its capital and surplus, according to A.M. Best.
S&P identified the co-ops suffering the worst capital ratios as those in Illinois, Arizona, Colorado, Nevada and Maryland.
The Community Health Alliance co-op in Tennessee reported that it’s net losses were 314% of its federal funding, according to the S&P report.
Via: Spectacle Blog
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