Another taxpayer-funded Obamacare consumer plan is teetering on the brink of collapse, according to a leading GOP senator who accused the administration of failing to prevent problems with the law's co-op plans.
More than half of the 23 taxpayer-funded, consumer oriented and operated plans have failed, and now one in Maine is on the verge of financial insolvency, according to Sen. Orrin Hatch, R-Utah.
Hatch chaired a hearing of the Senate Finance Committee on Thursday that focused on problems with Obamacare.
So far, 12 of the 23 Obamacare co-ops have shut down, and the leading culprits are a lack of federal funding and too much enrollment to cover costs. The federal government is trying to regain the more than $1 billion in taxpayer funds doled out as start-up funding to the plans.
Hatch said the Maine co-op is failing despite efforts by Medicaid to keep it solvent. The staunch Obamacare opponent called the co-ops a "failed experiment."
Maine's co-op said late last year that it would suspend enrollment in 2016 due to high enrollment and too many claim costs. The decision is one that has befallen other co-ops that enrolled too many people on the outset and couldn't cover claim costs.
But co-ops say another top reason for closure is a lack of federal funding, which the GOP-controlled Congress restricted.
The program is called risk corridors, and is intended to pay Obamacare insurers for substantial losses and force insurers to pay into the program as a result of high profits.
The goal of the program is to help insurers as they navigate an entirely new insurance market. Insurers had no idea who was going to enroll in Obamacare when the exchanges opened in 2013.
However, Congress included a provision in the 2014 spending bill that the program could pay out only what it could take in. This was in response to assertions by the administration that the program would be revenue-neutral.
As a result, the program paid out only about 12 percent of the nearly $3 billion in funding requests.
Democrats on the panel lashed out at what they called criticism of the co-ops instead of offering solutions to the issue.
"I am not going to be participating in any celebration of people suffering because co-ops were tied up in a congressionally induced economic straightjacket," said Sen. Ron Wyden, D-Ore.