As of this week, more than half of the Obamacare health insurance co-ops formed through the Affordable Care Act are now off the market, just as the new enrollment season opens.
The latest victim, Michigan’s Consumers Mutual Insurance, brings the death toll to 12 out of the 23 that opened in 2014.
The federal government provided US$2.4 billion in loans to get the co-ops going, and repayment from the failures is unlikely. Cutbacks in available funding have been cited as the main reason for insolvency almost universally, in fact only one co-op, the one in Maine, made money last year.
The collapses so far will disrupt insurance for around 740,000 individuals and small businesses, who have just weeks in come cases to choose new plans in time for them to take effect in January.
And the death toll is likely to rise, given the recent revelation of a 'secret' list of Obamacare health insurance co-ops on the verge of failure.
At the time, the Center for Medicare and Medicaid, which manages the Obamacare program, said that a further 11 as yet unidentified co-ops were on “a corrective action plan” or “enhanced oversight”, with the CMS demanding they take urgent action or face closure. That list has since shrunk but there are still a potential seven co-ops in trouble out there.
