Chaffetz Panel Wades Into Obamacare Healthcare Co-op Collapses

Members of the House Committee on Oversight and GovernmentReform want to know why half of the 23 Obamacare health insuranceco-ops have failed, and they are demanding documents from the Obamaadministration that may offer answers.

Utah Republican Committee Chairman Rep. Jason Chaffetz and three subcommittee chairmen sent a letter to the Centers for Medicare andMedicaid Services (CMS) Nov. 20 demanding it turn overdocuments about the co-ops by December 4. CMS is part of theDepartment of Health and Human Services and manages Obamacare.

An estimated 800,000 Americans are scrambling to find new healthinsurance coverage as a result of the collapses. It will costfederal taxpayers at least $1.2 billion. President Barack Obamaspent $2.4 billion overall to establish the co-ops, which areintended to provide publicly-funded competition forprivate sector health insurers.

Chaffetz addressed Andy Slavitt, the acting CMS administratorwho Obama nominated to serve as its permanent top official.

Marilyn Tavenner, his predecessor, left CMS in disgrace over thefailures that plagued the roll out of the Obamacare program.Slavitt’s nomination requires Senateconfirmation but so far the Senate has not acted on it.

Nebraska Republican Sen. Ben Sasse is promising toput a “hold†onSlavitt’s nomination until the administrationprovides additional information over the failures of the Obamacareexchanges.

In his letter to Slavitt, Chaffetz writes,“With 2016 premiums rising by double digits insome states, and more difficulties predicted both for the Exchangesand co-ops, it is critical that Congress assessCMS’ plans to protect consumers and safeguardbillions in taxpayer dollars.â€

But in only two years of operation, half of them face financialinsolvency, low enrollment and higher-than-expected medicalexpenses. Many co-ops quickly ran into the red as they tried tooffer below market rates that failed to generate sufficient revenueto cover promised benefits.

Iowa’s Co-Opportunity Health, one of the first co-ops tofail this year, paid out $1.40 in medical costs for every dollar ittook in as premiums.

Compounding the problem, the original federal rules for theco-ops stop anyone with experience in the commercial insuranceindustry from joining board or in management. As a result, many ofthe co-ops can’t hire people with knowledge andexperience in health insurance.

A July 2015 Inspector General Report for the U.S. Department ofHealth and Human Services found 22 of the 23 co-opsare in the red and hemorrhaging large amounts ofmoney.

Signing the letter with Chaffetz are OhioRepublican Rep. Jim Jordan , chairman of thepanel’s health care subcommittee, North Carolina RepublicanRep. Mark Meadows , chairman of the Subcommittee on GovernmentOperations, and Texas Republican Rep. Will Hurd , who heads theSubcommittee on Internet Technology.

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