The Obama administration pledged Tuesday to get back the $1 billion in taxpayer funding for 11 Obamacare insurance startups that have failed, but admitted it doesn’t know how much it can recover.
Under grilling from Republican lawmakers, an administration official said during a congressional hearing Tuesday that it will use “every tool available to recoup money” from the “consumer oriented and operated plans” created under the Affordable Care Act.
The law created 23 co-ops to spur more competition on the marketplaces, but financial woes have prompted 11 of them to close down. The law provided $2.4 billion in federal funding for the co-ops, $1 billion of which was given to the 11 that are shutting down.
“Obviously we wished we had a better batting average here,” said Dr. Mandy Cohen, chief operating officer and chief of staff for the Centers for Medicare and Medicaid Services, which oversees the co-ops.
Cohen was roundly criticized by Republicans during a hearing of the House Ways and Means Committee’s health subcommittee.
“Billions of taxpayer dollars were wasted on a program that was improperly designed on the federal level,” said Rep. Lynn Jenkins, R-Kan.
Democrats on the panel shot back that Republicans have choked off funding for the co-ops, dooming them to fail.
“If Congress gives them the support they need to get off the ground, they will provide the American people with more choices and help keep the for-profit insurers honest,” said Rep. Jim McDermott, D-Wash., the top Democrat on the health subcommittee.
He said Republicans have “shown that they have no interest in making this happen.”
The Affordable Care Act initially allocated $6 billion in funding for the co-ops, but Congress shrank that down to the $2.4 billion already given out in loans.
Republicans countered that the problem isn’t a lack of funding.
“The co-ops haven’t failed because they haven’t had enough money,” said Rep. Tom Price, R-Ga. “The co-ops failed because we have people with no experience running insurance companies.”
Cohen said the co-ops are winding down and the administration doesn’t know how much of the $1 billion it can get recoup.
A 2012 administration estimate found that about 40 percent of the co-op loan money would be lost partly because of outright failures.
