Another ObamaCare Issue: Health Co-Ops Are Failing

And problems aren't helping
By Evann Gastaldo,  Newser Staff
Posted Oct 23, 2013 8:44 AM CDT
Another ObamaCare Issue: Health Co-Ops Are Failing
President Barack Obama pauses while speaking in the Rose Garden of the White House in Washington, Monday, Oct. 21, 2013, on the initial rollout of the health care overhaul.   (AP Photo/Charles Dharapak)

As the nation focuses on the many issues dogging the ObamaCare website, the Washington Post points out another big Affordable Care Act headache: The health co-ops—nonprofit insurance companies established by Congress to increase competition and lower insurance costs—are floundering. One has shut down entirely and at least 10 more are in trouble; just 24 have even started selling insurance on the exchanges. Their failure could be a big problem for taxpayers, with the Post projecting the co-ops could default on up to $1 billion in loans. The problem: Facing opposition from insurance industry lobbyists, Congress put all sorts of restrictions on the co-ops, among them tight loan repayment schedules, limitations on selling insurance to big companies, and a ban on using federal money for marketing purposes. Plus, funding was cut big-time. Oh, and those website problems? Those are also hurting co-ops, which depend on the new health care exchanges for business. More ObamaCare news:

  • Two of those problems will take even longer to fix than expected, the Obama administration said yesterday. The administration initially said people would be able to electronically enroll in Medicaid by Nov. 1; now officials won't predict when that feature will be available, the Washington Post reports. And the Spanish-language enrollment portion was supposed to work by this week; it's still not functioning.
  • The administration has enlisted Jeffrey Zients, the former acting director of the White House budget office, to oversee the website fixes, CBS News reports. He has experience in business management, and Jay Carney says better management is exactly what is needed.
  • Lawmakers are pushing the White House to delay the individual mandate until the website works, and though the administration is still determined not to do that, the Washington Times reports that they've left themselves "wiggle room" if a delay ends up being necessary. Carney wouldn't rule out a delay, and analysts say Kathleen Sebelius can waive fines and penalties with a "blanket exemption" as a last resort.
  • Meanwhile, the administration is appealing to its allies to keep supporting ObamaCare, the AP reports. Even supporters (think Nancy Pelosi and Steny Hoyer) have complained about the website issues, and one Democratic senator is among those calling for a delay of the individual mandate.
(Read more Affordable Care Act stories.)

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