It’s impossible to say if any of Obamacare’s new taxpayer-funded health insurance plans will turn a profit this year, Obama administration officials said at a Thursday hearing where Republicans pummeled them for the plans’ high failure rate.
The House Oversight Committee hearing was the latest GOP effort to get answers from the federal government on why half of the Consumer Owned and Oriented Plans, or co-ops, have shuttered in the past year.
Of 24 original co-ops, just four are operating mostly as intended. Eight more are being monitored and worked on by the Department of Health and Human Services, while the rest are being closed down because of insolvency problems.
Republicans pressed officials with the Centers for Medicare and Medicaid Services on why they’re continuing to loan money to the rest of the co-ops when the program overall has resulted in so many failures.
“Why did you continue to award taxpayer dollars and loans?” asked Rep. John Carter, R-Texas. “If you know you’re on a sinking ship … we’re in a hole here, why are we still digging?”
“We share your concern here,” responded Mandy Cohen, chief operating officer for CMS. “That is why we’ve been doing the aggressive oversight we have.”
The co-ops were set up under the Affordable Care Act to provide more competition with private insurance plans in the new, online marketplaces. When it became clear last summer that many of them weren’t financially sustainable, Republicans seized on the failures as a new, effective way to pummel Obamacare.
The administration has spent about $2.4 billion on the program, although that’s a much smaller amount than was originally allocated in the Affordable Care Act before Republicans whittled the funding down.
Asked by Rep. Jim Jordan of Ohio how many of the remaining co-ops are profitable, Cohen said she “couldn’t say.”
“What we do know is it’s hard for small businesses to get profitable in the first few years,” she said. “It’s too early to know what their balance sheet is going to look like for 2016.”
