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COMMITTEE APPROVED: Bill to Protect Victims of Obamacare’s CO-OP Closures

September 08, 2016

Today, the Ways and Means Committee approved the CO-OP Consumer Protection Act of 2016 (H.R. 954), legislation to help Americans who have been harmed by Obamacare’s closing CO-OPs. Sponsored by Rep. Adrian Smith (R-NE), the bill exempts from the law’s individual mandate tax penalty those who unexpectedly lost their health insurance—through no fault of their own, but because of a particular Obamacare failure.

As Rep. Smith explained:

“This is a short, simple bill with a basic premise – if you are a consumer who complied with the ACA’s individual mandate by purchasing health insurance through one of the Consumer Oriented and Operated Plans, or CO-OPs, created under the law, and your plan was terminated mid-year by the failure of that CO-OP, you shouldn’t be liable for the individual mandate for the remainder of that calendar year.

“We have already had a hearing on what happened with the CO-OPs, so I won’t spend a lot of time rehashing that history. In short, $2.1 billion, largely in the form of startup and solvency loans, was distributed to approved CO-OPs. Now, 16 of the 23 CO-OPs which received $1.7 billion of those dollars have closed or are in the process of closing, with the remaining seven also struggling to remain solvent.”

Highlighting how the collapsing CO-OPs have directly hurt Ohioans, Health Subcommittee Chairman Pat Tiberi (R-OH) said: 

This is not hypothetical. This is happening right now … Thirty-one percent of American counties have one provider of health insurance, they don’t have choices. They don’t have choices in my state. InHealth, the CO-OP in my state, 22,000 people lost their health coverage 

“In Ohio, if you had InHealth, in some of my counties not only did you wake up one day and have no health insurance – zero, none – you lost your doctor. Now you go look at the plans, there’s one. One plan … you lose your health care, you lose your doctor, and now you’re going to get penalized.”

Rep. Smith added:

It is only fair that we reduce the impact further for these families, and ensure that if any other CO-OPs close that families struggling to make an unexpected decision about health insurance midyear don’t have individual mandate penalties to worry about as well.”

CLICK HERE for more information about today’s markup.