I’ve covered the collapse of many Obamacare co-ops, and how they failed because they were built on Liberal/Socialist ideas. Here’s some confirming evidence from the Daily Signal: “How Overregulation Led to the Collapse of Obamacare’s Largest Co-Op.”
A new report examining the collapse of Health Republic of New York, Obamacare’s largest co-op, said its failure—which may lead to a $265-million loss of taxpayer dollars—can be attributed in part to heightened regulatory control by the state.
According to the analysis from the Albany, New York-based Empire Center, a “breakdown” in oversight from the state Department of Financial Services and artificial cuts in Health Republic’s premiums may have led to the ultimate failure of the consumer operated and oriented plan, or co-op.
Of the 23 co-ops created under the health care law, just 12 remain.
“The rapid rise and costly fall of Health Republic Insurance of New York … is a cautionary tale for policymakers in Albany as well as in Washington,” the report’s author, Bill Hammond, wrote. “Despite heavy federal subsidies and robust enrollment growth, Health Republic lost money at such a clip that state regulators forced it to shut down as of Nov. 30, on barely two months’ notice.”
Health Republic, one of 23 co-ops implemented under Obamacare, sold the cheapest plans available on New York’s state-run exchange and enrolled more than 200,000 customers in coverage. According to the Empire Center, Health Republic offered consumers broad networks, and its plans were significantly cheaper than those sold by competitors like UnitedHealthcare and Aetna.
As a result of its low premiums, Health Republic experienced significant losses in 2014, as its customers’ medical claims and administrative costs outpaced the revenue it was bringing in through premiums.
Naturally, the state then refused to let them raise rates. The result was predictable.
But the New York state politicians aren’t about to admit their role in this mess. Instead, some of them want to find someone at Health Republic to blame: