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Another Day, Another Obamacare Failure

October 20, 2015

New York. Louisiana. Iowa. Nevada. State by state, coast to coast, non-profit insurance programs created under Obamacare are failing, wasting millions in taxpayer funds—and leaving thousands scrambling to find new insurance.

Here’s the story. In 2009, when Democrats failed to shore up enough support for a so-called “public option” under Obamacare, they agreed on the Consumer Operated and Oriented Plan (CO-OP) program instead. CO-OPs were created to be non-profit insurance companies, set up by government loans. (The thinking was that these CO-OPs would be friendly insurers, who would be a great alternative to the private sector because they wouldn’t have to worry about making a profit.)

So, as mandated by Obamacare, billions of federal dollars were pumped into these start-up insurance outfits to offer health plans in both individual and small-group markets.

And how’s that working out?

Not well. In a misguided attempt to create “competition,” many CO-OPs grossly underpriced their insurance plans and misjudged the market, resulting in enrollment levels they did not foresee and, more simply, couldn’t handle. And after receiving billions of taxpayer dollars in the form of federal loans, many of these start-ups have collapsed, leaving thousands of beneficiaries—and millions of taxpayer dollars—in jeopardy.

Consider the month of October. This month alone, four different CO-OPs announced closures in Kentucky, Tennessee, Colorado, and Oregon. That brings the tally to just 15 of the original 23 CO-OPs remaining in operation.

Simply put, the CO-OP program is a disaster, another prime example of how Obamacare’s flawed policies are wreaking havoc on the average American. Because when these CO-OPs fail, it’s more than just lost taxpayer dollars. It’s real Americans who are forced to start over, once again needing to find new coverage.

That’s why members of the Ways and Means Committee are demanding answers. Earlier this month, Oversight Subcommittee Chairman Peter Roskam (R-IL), Health Subcommittee Chairman Kevin Brady (R-TX), and committee member Rep. Adrian Smith (R-NE) wrote to the Centers for Medicare and Medicaid Services on the need “to improve oversight, accountability, and transparency of the CO-OPs.” We want to know: What’s being done to prevent more CO-OPs from failing? What’s being done to save taxpayer dollars? And what’s being done to protect those who stand to lose when these programs fail?

Because, ultimately, it’s protecting American citizens that matters. We should be encouraging innovation and exploring new insurance models, especially if it means pairing better quality health care with more affordable pricing. But taking on this Obamacare program was doomed from the start, and not another taxpayer dollar should go to this collapsing program.

Unlike the failed policies of Obamacare, we should implement a true patient-centered system that gives families the stability and freedom they need. It isn’t Washington bureaucrats who should make health decisions for American families—and these failing CO-OPs prove just another reason why.