Company that got $146 million from Obamacare falters, taken over by state
Des Moines Register:
CoOportunity Health, a fledgling Iowa health insurance company set up under the Affordable Care Act, has been taken over by state regulators and could soon go under, officials said Wednesday.It is one of 23 coops set up to deal with Obamacare and is the first to get into financial trouble. It is unlikely to be the last. It has become an example of the mess created by the Democrat's hated healthcare plan. The government is just not very good at setting prices that match costs, and in this case a company set up to do that has failed.
CoOportunity Health is an insurance cooperative, which was set up to give consumers and small businesses an alternative in a market with few choices. The company has received about $146 million in federal money under the Affordable Care Act, also known as Obamacare.
Insurance Commissioner Nick Gerhart said that CoOportunity Health has about 120,000 members in Iowa and Nebraska, and saw its available money drop from $47 million to $17 million from Oct. 31 to Dec. 12.
The company hasn't reached insolvency, he said, but it doesn't have enough money on hand. In layperson's terms, he said, it's as if a small business suddenly had its credit cut off by a bank, which in this case is the federal government.
"They ran into a liquidity crisis, and their lender shut the window on them," Gerhart said.
CoOportunity has stopped taking applications from new customers, but those who bought CoOportunity policies before Dec. 16 can continue using their policies for health care. However, Gerhart said people who have CoOportunity policies should consider switching to another carrier.
CoOportunity started selling insurance in 2013. Many industry analysts predicted the company would do well, largely because its founders included a former Iowa insurance commissioner and a former top executive of Iowa's dominant health insurance carrier, Wellmark Blue Cross & Blue Shield. But the cooperative struggled to set its prices to match the health risks of its customers, and its financial condition plummeted.