Monday, August 17, 2015

August, 2015, Part 3, The Unfolding Disaster That Is Obama Care: And The Co-ops Are Imploding

Every month for years now we have had to discuss how bad Obama Care is turning out to be under the continuing theme, “the unfolding disaster that is Obama Care.” This month is no different. As the legislation continues to march through America, driving up health care and health insurance prices as it serves as dead weight on economic growth, it cements it rightful place as the worst piece of legislation Washington has ever produced.

It never had a chance to be successful since it really never addressed the underlying root causes of our ever increasing health costs in the country:
  • Americans eat too much of the wrong kind of food, resulting in obscenely high obesity rates for the country.
  • Our food chain is infested with overdoses of high fructose corn syrup, salt, and other unhealthy additives.
  • Americans smoke too much.
  • Americans do not exercise enough.
  • The country is in serious need of health care tort reform.
  • Barriers to insurance company competition across state lines need to come down.
  • Obama Care never “followed the money” to find out who is actually profiting from the ever escalating healthcare costs in this country and how to get those factors under control.
  • Obama Care never got the immense amount of fraud and abuse in current government healthcare programs, Medicare and Medicaid, under control in order to save money to efficiently fund other government health care initiatives.
  • Obama Care never put serious research money towards curing the major diseases that drive high healthcare costs such as high frequency cancers and dementia type diseases
  • You cannot resolve any problem unless you understand and address the underlying root causes. No difference here but with a big exception: Obama Care legislation never addressed these listed root causes and thus, has no chance of ever being successful.
Today and probably for the next few days, we will look at the latest disasters from Obama Care, including the gathering evidence that Obama Care policy holders are in for a big and ugly financial surprise in their 2016 costs along with some personal stories on how Obama Care is causing havoc with American families.

1) Yesterday we discussed the reality that the majority of Obama Care state operated health insurance exchanges are either already kaput or on the verge of imploding. Well, it turns out the vast majority of Obama Care health co-ops might be in even worse shape. Health co-ops were set up across the country, about two dozen of them, to offer insurance policies to people that were living in areas that did not have a lot of insurance company competition. 

The theory is that these nimble and aggressive entities could offer low cost Obama Care policies and keep the single or low number of established insurance company competitors from dominating the market, keeping costs down. Well, nice theory but a failure in practice, as described by the writing of Melissa Quinn, writing for the Heritage Foundation in late July, 2015:
  • The Louisiana health co-op recently became the second Obama Care co-op to go belly up financially despite receiving $66 million from the American taxpayer to get established.
  • $66 million ended up getting 17,000 Louisiana residents health insurance, a per customer cost of about $3,800 per customer.
  • These 17,000 customers were garnered in the first two years of Obama Care despite the business plan for this co-op forecasting that 28,000 customers would be served in just the first year.
  • Louisiana Insurance Commissioner Jim Donelon issued a statement on why the co-op failed: “It is a difficult time for health insurers of every size. The onerous burdens of Obamacare have shocked health insurance markets and caused instability in pricing and predictability, and as a result, we’ve seen premiums spike upward. Start-ups in insurance, especially health insurance, are always a tough row to hoe. Obamacare has made that even more difficult.” 
  • But wait: wasn’t Obama Care supposed to make insurance cheaper and not spike premiums higher? Wasn’t Obama Care supposed to make getting insurance easier, and not “even more difficult?”
  • CoOportunity Health, a co-op that served Nebraska and Iowa, has already shut down after its customers’ medical claims far outpaced what it brought in from premiums.
  • CoOportunity received more than $145 million in taxpayer backed loans from the Centers for Medicare and Medicaid Services, with repayment of those loans being in doubt since the co-op is now defunct.
  • In a separate article Ms. Quinn went on to explain that 22 of the 23 Federal funded and taxpayer backed co-op were unprofitable in 2014, according to a Federal recent audit.
  • Many of the co-ops enrolled far fewer people in policies than expected or needed to stay solvent and viable.
  • While in total the co-ops received $2 billion in taxpayer backed loans, many of those loans are unlikely to ever be paid, given the dire financial straits of the vast majority of those co-ops are in.
  • The Arizona co-op is the top loser from an enrollment perspective, gathering just 860 Arizona residents as customers in 2014 against a target of 23,998. This comes out to an almost unbelievable hit rate of 3.5% of target.
  • On the other extreme, the New York co-op signed up 155,402 people vs. its target of 30,864.
  • 22 out of 23 of the co-ops lost money in 2014.
  • The Tennessee co-op froze its enrollment levels during the second ObamaCare enrollment period because of its perilous financial situation.
  • According to the audit report, the Centers for Medicaid and Medicare Services placed four co-ops on “enhanced oversight and corrective action plans” status and two were put on notice for low enrollment
Another day, another failure of an Obama Care component. Yesterday, it was the exchanges we saw that were imploding. Today, it is the Obama Care co-ops that are imploding. In both cases, taxpayer money is lost with no benefit received, insurance costs continue to go up, and the mess gets bigger and bigger. Tomorrow, more messes and more wasted wealth.Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

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