As it turns out, the non-profit co-op model for health insurance turns out to be unsustainable without government subsidies. More than half of the co-ops have been shut down this year, and nine of the 12 have shut down since October 1, either by HHS or by the states in which they operate. Over a billion dollars in loans and and backstop payments have been lost. The latest failure to be announced was in Michigan, where Consumers Mutual Insurance announced Tuesday that it would not sell insurance for 2016. The failure of these dozen co-ops has left nearly 750,000 consumers in the cold, looking for a plan from a traditional insurer at a higher price.
What happened? Predictably, the financial model that critics warned would lead to a death spiral for insurers hit the co-ops first. “They were low-cost alternatives,” Kaiser Health’s Mary Agnes Carey told PBS anchor Judy Woodruff. “If they were the lower price point, that tended to attract sicker beneficiaries. That would drive up their costs.”
No comments:
Post a Comment