For feds, fate of dead CO-OPs' former enrollees is a mystery

The U.S. Department of Health and Human Services can give Congress no information about the fate of the consumers affected by failures of Consumer Operated and Oriented Plan carrier failures.

The lack of HHS data on stranded CO-OP enrollees came out today, when the fully House Ways and Means committee marked up and approved House Resolution 954. The bill would exempt people stranded by CO-OPs that fail in the middle of the year from the individual shared responsibility penalty.

The Internal Revenue Service imposes the penalty on many people who fail to own what the government classifies as minimum essential coverage for enough of the year. The goal is to get healthy people to pay for coverage, rather than waiting until they get sick to get covered.

The Affordable Care Act drafters provided startup funding for the nonprofit, member-owned CO-OPs in an effort to increase competition in the health insurance market. Because of a combination of limited funding, complicated regulations, sudden changes in ACA insurer support programs, and tough competition, CO-OPs covering about 650,000 people failed before the start of the year. CO-OPs covering another 100,000 have already closed this year, or are on track to close soon.

Rep. Adrian Smith (R-Neb.), a lawmaker from the state that suffered the first CO-OP failure, said he tried to write a narrow bill that would simply help the people hurt by CO-OP failures avoid suffering an unfair tax penalty through no fault of their own.

Rep. Xavier Becerra (D-Calif.) brought up a point often cited by health insurers: that weakening the ACA coverage ownership mandate could back fire, by easing the healthiest risks out of the system, raising claim ratios for the insurers, pushing up premiums, and, in some cases, leading “healthy” uninsured people to run to the government or charity programs for help when they do experience unexpected catastrophes.

Rep. Sander Levin (D-Michigan) and Rep. Jim McDermott (D-Wash.) said they saw the bill as part of the ongoing Republican effort to kill the ACA.

“Republicans wanted the CO-OPs to fail from the start,” McDermott said.

Democrats also questioned whether Republicans have any evidence that many consumers stranded by CO-OP failures have paid the penalty for lack of coverage.

Thomas Barthold, chief of staff of the congressional Joint Committee on Taxation, said he was unable to provide the evidence because HHS could supply no information on what happens to the people stranded by failed CO-OP. HHS has no information on how many of those people buy new coverage, stay uninsured and pay the penalty, he said.

Tiberi says there’s a real problem

Rep. Pat Tiberi (R-Ohio), chairman of the Ways and Means health subcommittee, said Democratic colleagues’ accusations of partisanship, and suggestions that the stranded CO-OP enrollees’ problems might be hypothetical, were making his head explode.

“This is not hypothetical,” Tiberi said. “Are you folks not knocking on doors and talking to people?”

In 31 percent of Ohio counties, consumers affected by a mid-year CO-OP failure had only one alternative, and that alternative plan used networks that often cut those consumers off from doctors they had been using for years, he said.

Tiberi said he tries to leave his politics out of health insurance matters, because health care is so important, and because he himself remembers being uninsured when his father lost health coverage.

Democrats often accuse Republicans of trying to repeal the ACA rather than trying to fix it, Tiberi said.

“Today, we’re trying to fix it,” Tiberi said.