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Lawmakers play PPACA CO-OP failure blame game

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Republicans and Democrats on the House Ways and Means health subcommittee today made the most of a chance to pin the recent wave of CO-OP carrier failures on each other.

Rep. Kevin Brady, R-Texas, chairman of the subcommittee, organized the hearing to take a look at the poor performance of the Consumer Operated and Oriented Plan (CO-OP) health insurers, a group of companies started with a loan pool created by the Patient Protection and Affordable Care Act of 2010 (PPACA).

See also: Is that CO-OP dead? Or alive but dying?

Dr. Mandy Cohen, the chief operating officer of the Centers for Medicare & Medicaid Services (CMS), was the only witness. She noted that Congress has taken away about two-thirds of the $6 billion in funding that PPACA had originally provided for the program.

CMS ended up approving CO-OP startup applications from just 24 of the 147 applicants, and it has monitored them by coordinating with state insurance regulators, and by conducting regular conference calls, on-site visits in 14 states, and audits, including forensic audits, Cohen said.

Cohen said CMS has tried to act quickly enough to ensure that CO-OPs will be able to meet obligations to pay health care providers for the care delivered to enrollees.

“We wanted to make sure there was not a mid-year failure next year,” Cohen said.

Although a funding shortfall at the PPACA risk corridors program — a program that was supposed to use cash from thriving PPACA exchange plan issuers to help ailing issuers — hurt the CO-OPs, the shortfall was just one of a number of important challenges they have faced, Cohen said. (You can watch the hearing video below.)

The CO-OP managers have also faced tough competition, difficulties with building provider networks, and problems with knowing how much to charge for coverage, Cohen said.

Rep. Lynn Jenkins, R-Kan., called the CO-OPs’ performance a disaster.

And Rep. Sam Johnson, R-Texas, said CMS should have been more proactive at detecting and responding to financial problems. ”These CO-OP failures ought not to have been a surprise,” Johnson said. “Why didn’t you do more to protect taxpayers’ dollars?”

See also: Consultant: CO-OP Plans Have a Chance

Rep. Tom Price, R-Ga., a medical doctor, said the root cause of the CO-OPs’ problems is obvious. “The CO-OPs have failed because you have people who don’t know how to run insurance companies running insurance companies,” he said.

On the other hand, Rep. Jim McDermott, D-Wash., said Republicans on the subcommittee were failing to take responsibility for the effects of their budget cuts. The Republicans on the subcommittee are making “complaints about problems they have created with their own sabotage,” McDermott said.

And Rep. Mike Thompson, D-Calif., said the existence of the CO-OPs isn’t the fault of Democrats like him. ”What most of us wanted was the public option,” or a Medicare-like, government-run plan, he said. “This was the fallback.”

See also: Bill Gets Mixed Reviews


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