Can you point to examples of these local start-ups ?
And who is attacking them.
Nashco | Member CO-OPs
They're non-profit, locally grown, and member-owned. And, they're start-ups that have just entered the market in the last few years. They exist to offer new alternatives to the large for-profit national insurance carriers and inject some competition into markets. For a time, it was working (
Lower Premiums in CO-OP states;
ACA co-ops cut prices, heat up competition). Soon they may not exist at all.
They've been under attack by the GOP Congress since 2013 when their
access to new capital was cut off, but what killed off most of those that have failed in the last six months was the crippling of the
risk corridor program that was needed to support them during this startup phase.
Industry insiders say the co-op collapse could have been avoided had Congress not stymied those payments.
“I think most of them could've weathered through the other problems had it not been for the default on the risk-corridor payments,” said Barbara Smith, a principal at consulting firm Health Management Associates. Smith was the founding director of the co-op division at the CMS' Center for Consumer Information and Insurance Oversight, or CCIIO.
The short-term outlook remains bleak for many of the remaining co-ops and other small and mid-sized health insurers that sell exchange plans. The
recently signed budget bill included the
same risk-corridors provision (PDF) from last year's deal, which requires those payments to be budget-neutral. The ACA did not require the risk-corridor program to be budget-neutral.
Marco Rubio touts this as his greatest achievement in the Senate. The real result is that soon many markets will have only the large for-profit mega-insurers to choose from. Way to go, Marco!