The Loan Ranger of Obamacare
If you thought your doctor bills were getting bigger, you should see the federal government’s! According to a troubling new report, Uncle Sam is deep in debt to the country’s doctors and hospitals, thanks to a collapsed co-op system built into the president’s health care law.
“The co-ops were supposed to be the happy face of health care,” the Washington Times explained, “user-friendly, non-corporate plans offered as a part of the Obamacare’s exchanges, designed to convince consumers skeptical of major insurance companies that there was a real alternative for them in President Obama’s signature health care law.” When Democrats scrapped their plans for a public option in Obamacare, these co-ops were the compromise between government-run health care and a single-payer system. The goal was that they’d be operated as nonprofits, so that consumers would have an alternative to a public entity. To get the co-ops off the ground, the federal government pumped hundreds of millions of dollars into the idea — without any gauge of how successful they would be.
Turns out, not very. “Less than a year into operation, the financial condition of many of these co-ops was unstable at best,” Senator Ben Sasse (R-Nebr.) stated at this week’s hearing on the co-ops. “As today’s report shows, [Center for Medicare and Medicaid Services’] own private consultant, Deloitte, warned that this was the case. Despite this, CMS continued to disburse loans and even awarded additional loans. Since then, 12 have gone out of business…” But this mistake was a particularly costly one — especially for insurance companies, doctor networks, and patients. If the co-ops can’t pay down their debt, someone will have to. “In some states, these losses will be absorbed by other insurance companies — which means, by the policyholders of other insurance companies who have to pay increased… premiums. In other states, doctors, hospitals, and individual patients stand to suffer large out-of-pocket losses due to the co-op failures — as our report details.”
Worse, the co-ops intentionally set “artificially low premiums” to attract customers and then stood by helplessly as the system imploded. Now that their co-ops have gone under, more than 740,000 Americans are back to square one: finding insurance. As usual, this massive failure means that the people Obamacare was supposed to cover aren’t covered at all. As much as $2.4 billion dollars is down the drain, and, as senators like Rob Portman (R-Ohio) warned, “We shouldn’t hold our breath on repayment.”
That’s particularly sobering news for the doctors’ networks and insurance companies stuck with the tab. For a law that’s done more damage than it’s solved, experts say the co-ops are a new low, “exceed[ing] the projected worst-case-scenario losses outlined in their loan applications.” And while the administration was reportedly aware of the problem, it did nothing. “Despite getting regular reports that the co-ops were hemorrhaging cash, HHS took essentially no corrective action for over a year,” said a frustrated Senator Sasse, who personally sent four letters to the agency demanding answers.
For taxpayers, it’s a double whammy. Not only is more of their money flushed down the Obamacare drain, but many will be hit again with higher premiums because of it. Six years into the worst health care mistake in history, the president’s signature failure is draining the lifeblood out of our health care system. For voters, it’s even more confirmation that America needs to elect a president who will make repealing Obamacare priority number one!
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