Next year, Nevada customers will have to find new health insurance coverage as yet another Obamacare co-op is forced to shut down.
The Nevada Health Co-Op will close January 1 after losing $15 million. The co-op cites “challenging market conditions” as the reason for closure. This is the third Obamacare co-op to close after CoOpportunity Health, which served customers in Iowa and Nebraska, and the Louisiana Health Cooperative were both forced to shut down.
The Nevada Health Co-Op closed despite a $65 million taxpayer-funded loan and projected earning of $371,000 in 2014. The Daily Signal reports that it’s unclear if the loan will be repaid. In total, the 23 co-ops established under the Affordable Care Act have received $2.5 billion from Centers for Medicare and Medicaid Services.
Ed Haislmaier, a senior research fellow in health policy at The Heritage Foundation told the Daily Signal that Obamacare’s consumer operated and oriented plans “can’t raise the capital they need to sustain initial operating deficits.” He also added that “the government created the nonprofit cooperatives in such a way that there’s just no way for the cooperatives to get access to capital other than a government loan or subsidy.”
Haislmaier phrased it as “a badly done attempt to reinvent the wheel with some genius deciding to make it oval instead of round.”
23 co-ops were established under the Affordable Care Act in 2012 to assist with competition in areas where few plans were offered. Only the Maine Community Health Options has been profitable. 13 of the 23 co-ops enrolled fewer consumers than expected in 2014.
