October 31, 2015
When CoOportunity Heath failed, 120,000 individuals — the majority of whom are Nebraskans — lost their health plans. They deserve to know what went wrong.
The several hundred thousand Americans who lost coverage when nine additional CO-OPs failed across the country deserve honesty, and taxpayers deserve transparency regarding the billions of dollars they loaned to these failed projects. Until we get those answers, the Senate should refuse to fast-track nominees to the Department of Health and Human Services (HHS), the agency responsible for overseeing this mess.
HHS owes Nebraskans clear answers. Here are the kinds of questions HHS needs to address. It’s pretty simple:
- Did the people who ran these CO-OPs know how to make the numbers work?
- Why were these 23 CO-OPs given $2.4 billion, and where did the money go? How and when exactly were these decisions made?
- Was Washington throwing good money after bad by giving CoOportunity an additional $32 million just three months before it was forced to shut down?
- Can taxpayers expect to see the billions they loaned to these CO-OPs? Does HHS have any plan to make that happen?
- Did HHS know these failures were coming, and could consumers have been better protected? Was there a way to prevent the suffering that these families endured? Did HHS tell anyone that these problems might be coming?
We don’t have those answers yet. In fact, some in Washington are claiming that these CO-OPs would have succeeded if only they had received more taxpayer money through a bailout known as the ACA’s risk corridor program. If Congress allowed insurer bailout money, they argue, we wouldn’t be in this mess. But here are the inescapable facts: First, CoOportunity was in serious financial trouble long before Congress clarified that there would be no bailouts. Second, as the Obama administration has said, this program was never designed to be an unlimited taxpayer-funded bailout.
Just how big is this problem? The Affordable Care Act’s CO-OP program created 23 nonprofit health insurers across the country with $2.4 billion in taxpayer-funded loans. They began selling insurance in 2014 and, so far, 10 of them are already going out of business.
What about the others? Are they more successful? Hardly. A report from the HHS Office of Inspector General says only one of them was operating in the black at the end of 2014. This is a systemic failure.
Were these CO-OPS built on sound business models? It is possible that part of the problem was unsound pricing. For example, according to one analysis, CoOportunity priced its product more than 20 percent below the average silver plan premium of their competitors. The CO-OPs in New York and Kentucky have similar pricing compared with their competitors, and both are closing at the end of this year.
My office first asked questions after CoOportunity failed. We asked again when a second CO-OP in Louisiana went under. After eight CO-OPs had failed, we said that we’d oppose the nomination of new HHS nominees. Since we first asked, hundreds of thousands more Americans have been harmed by these failures and will face similar disruptions. Despite all this, HHS still refuses to explain what has happened.
This isn’t about spreadsheets — it’s about people. This is about the Nebraskans who lost coverage, the taxpayers who paid the bill, and the bureaucrats who sent out the checks.
Republicans and Democrats have a duty to our constituents, and HHS has a duty to provide these answers.
Enough is enough. CO-OP collapse victims who lost coverage & taxpayers who paid billions in loans deserve answers. https://t.co/nhQGF7DIIz— Senator Ben Sasse (@SenSasse) November 2, 2015
Contrary to the claims of some, demanding good governance isn’t partisan — it’s problem solving. We can only fix this mess after we’ve found the facts.
To date, HHS has refused to answer even the most basic questions. This is the agency that moved actuarial and solvency decisions further from the states — something they now appear to have no actual competence to execute. If Congress is going to prevent this from happening again, we need to understand exactly what went wrong.
Enough is enough. The victims — tens of thousands of Nebraskans and hundreds of thousands nationwide — who lost coverage deserve answers. The taxpayers who paid billions in loans deserve answers. Confirming new HHS nominees before that happens would be irresponsible and cruel. We have an obligation to get those answers.