Risk Corridor Massacre: The Autopsy
Over at SNL Financial, healthcare reporter Adam Cancryn has posted what looks to be the definitive history of the ACA Co-Op debacle, documenting everything which went wrong from the beginning up through today:
In late September, the handful of CEOs leading Affordable Care Act-funded consumer operated and oriented plans traveled to Denver in search of answers.
The past year had been a difficult one. Their companies were struggling, awash in red ink and facing a mounting list of operational challenges. A few co-ops had already shut down, and regulators were circling several more. The fledgling health insurers needed more support from the Centers for Medicare & Medicaid Services if they were going to survive. Most importantly, they needed a lot more money.
For months, the co-ops had banked on receiving hundreds of millions of dollars from the federal government through the ACA's "risk corridor" program. They would soon learn that only a fraction of that money was actually on its way. The decision would drive eight co-ops out of business and cripple several others, attracting national attention and sparking congressional investigations. More than a half-million people would suddenly need to find new health insurance.
Yet as they touched down in Denver for a pair of meetings with CMS officials, the co-op CEOs held out hope. The CO-OP program was already built to fail, co-op executives, former CMS employees and others close to the process told SNL, thanks to a combination of partisan politics and government mismanagement. What could have been one of the more innovative concepts to emerge from the ACA was fast becoming a taxpayer-backed albatross. The risk corridor payments would at least stave off a complete collapse and quiet the growing belief that the Obama administration that birthed the CO-OP program five years ago was now quietly trying to kill it.
I'd strongly advise healthcare junkies (as well as political junkies of all stripes) to read the whole thing. Obviously I have no idea whether everything he claims is accurate, but it all seems to jibe with everything I've learned so far.
While I've torn Congressional Republicans to shreds for crippling the ill-fated Risk Corridor program (and rightly so), and have also pinned some of the blame on the Obama administration for their knee-jerk reaction-based decision to allow "transitional" policies to extend well beyond the original 12/31/13 deadline, the full story is far more complicated, and has far more causes and blame to spread around than just these two things. The whole thing is worth a read.
It's worth keeping in mind, however, that while 12 of the 23 Co-Ops have gone under to date, at least a few of the 11 which remain were actually doing quite well last time I checked, including the ones operating in Maine, New Hampshire and New Jersey, with another half-dozen or so seeming to be holding their own at the moment.