Organizers of many of the new nonprofit, member-owned co-op plans could have trouble repaying federal startup loans.
Daniel Levinson, the inspector general of the U.S. Department of Health and Human Services, makes that case in a report on efforts by the Centers for Medicare & Medicaid Services to set up the Consumer Operated and Oriented Plan Program.
The drafters of the Patient Protection and Affordable Care Act provided $6 billion in co-cop startup loan funding, in the hope of creating a new type of carrier that could increase the level of competition in the commercial health insurance market, especially in communities in which one or two carriers provide most of the commercial coverage.
Congress cut co-op startup funding back to about $2 billion in the American Taxpayer Relief Act of 2012. Co-op organizers in 24 states now owe CMS a total of $1.98 billion, Levinson wrote in his co-op report.