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Life Health > Health Insurance > Health Insurance

On the Third Hand: Spite

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One of the saddest effects of mindless partisan hatred is that, when problems with Patient Protection and Affordable Care Act (PPACA) programs crop up, and the programs die, the folks with power have a bipartisan incentive to wipe out any salvage value.

Fervent Republicans seem to want to transport any PPACA program corpses into space and wipe them out with photon torpedoes.

Fervent Democrats seem to want any PPACA program corpses to evaporate, to avoid letting any of those filthy profit-seeking enterprises benefit from the remains of gorgeous, perfect entities that would have done great, amazingly great, if the Republicans had not poisoned them.

Meanwhile, thrifty, middle-of-the-road, pragmatic taxpayers who just want everybody to be happy, and for any public or private health programs that are out there to work properly, see what could be tens of millions of dollars, or even hundreds of millions of dollars, in asset value going “poof.”

One example is what apparently will happen to Health Republic Insurance of New York, one of the failed non-profit, member-owned Consumer Operated Oriented Plan (CO-OP) carriers, and other CO-OPs that managed to build a decent level of name recognition.

On the one hand, it seems as if going by what state regulators say, the managers of Health Republic of New York, which attracted 200,000 enrollees, did a poor job of managing the company’s finances. They say it has to be shut down because it’s in terrible condition. A quick look at consumer review sites would suggest that the carrier might not have had great administrative systems, either.

But, on the other hand, the carrier was good at marketing itself and building brand name recognition. It did attract 200,000 enrollees. That might be partly because it underpriced its coverage, but I know I personally saw its giveaways all over the place. 

If Health Republic of New York were a traditional, for-profit insurance company, I think rehabilitators and others would be talking about trying to sell its brand name, its logo, its member lists, or any other assets it happened to have, to get some more cash for the creditors and, maybe, to increase the odds that someone, somewhere would get some use out of the assets.

In this case, no one seems to even be talking about the slim possibility of trying to do something with the assets. And, in the case of Health Republic of New York, for example, regulators seem to be doing everything they can to wipe out any remaining value of its brand name as they shut down. They don’t seem to have any interest in trying to pretend that it’s something a big health insurer might want to buy to put in its pet rock collection.

That’s partly because the U.S. Department of Health and Human Services (HHS) has interpreted the CO-OP provision in the Patient Protection and Affordable Care Act (PPACA) to mean that a CO-OP’s member-owners can never, ever sell the CO-OP, to anyone. But I think it’s partly because fervent Democrats and fervent Republicans are just too busy hating each other for the joy of hating each other to try to change PPACA to let someone (maybe the CO-OP receiver, or HHS, or Pawn Stars) sell failed CO-OPs’ assets.

See also: PPACA: CCIIO Peers Into CO-OP Future

The state-based exchanges that have failed mostly seem to continue to exist as marketing entities. They simply hand the administration job over to to HHS. But I think the same principle applies there: Exchange organizers spend a small fortune on marketing, to successfully build brand name recognition, and then, when they run into Web glitches, they don’t seem to spend three seconds about trying to squeeze some cash out of the value of the brand recognition.

Should those half-alive exchanges keep their names and Web addresses, or should they be trying to sell their names and other intellectual property to a private company?

On the third hand, why should Democrats, Republicans or U.S. officials in any other party care about PPACA program corpse salvage values?

For those folks, health care program money (and PPACA destruction money) might as well grow on trees. They have no skin in the health program game (except a little, as taxpayers). They might as well let any value go poof.

See also: On the Third Hand: Prices


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