Friday, November 27, 2015
Billy Long: Obamacare did not make sense from the beginning
As you may have heard, the House of Representatives has recently been taking a close look at the failure of 12 of the Affordable Care Act's (ACA) health insurance Consumer Owned and Oriented Plans (CO-OPs). These closures mean that more than half of these health centers have now failed, and have cost American taxpayers $1.3 billion.
The original theory for COOPs, was that these non-profit health insurance companies would provide low cost coverage to individuals and small businesses. A total of 23 insurers were set up to the tune of $2.4 billion in government loans and they began enrolling patients - many of which had already lost coverage due to the ACA cancelling previous policies in 2013 and 2014.
In just 3 years, 13 have already failed, accounting for more than 800,000 people across 14 states that are now scrambling for coverage. The situation is even direr than that. Given that only one of the remaining 11 CO-OPs even made a profit last year and that the remaining 11 could also be in danger of closing, the number of uninsured patients is at great risk of getting even larger.
I've said repeatedly that this law simply did not make sense from the beginning because the numbers to pay for it just weren't adding up. The case of the failed CO-OPs is one of those glaring real-time examples of this budget imbalance. Many of the now closed CO-OPs say that their operations had barely received 12 percent of the total funds they needed from the federal government. These health insurance centers were originally touted to be self-sustaining without focusing on profits. However, this was due to an irresponsible reliance on Congress to continually allocate more and more money to the CO-OPs, which would have only added to the ACA's already irresponsible $1.2 trillion price tag.
Moreover, those running the centers were grossly underqualified and faced no requirement to have any experience running an insurance company before their involvement. In fact, CO-OPs were forbidden to have anyone affiliated with an existing health insurer on their boards. It seems that even the federal dollars that these centers did receive was being improperly managed. With all of this to consider, it looks like a failed business experiment on the backs of taxpayers.
Even worse, UnitedHealth Group threatened to pull out of the ACA this month after reporting that they had lost a shocking $425 million downgrade to its earnings forecast this year. The losses were almost all because of losses on ACA exchanges. They cited a costly risk pool that lacks younger and healthier enrollees that were expected to buy overpriced plans to subsidize others. This has already caused a major stock decline in the health market as a whole, and could prove an even more daunting future for the ACA than even just the COOPs show.
This system was broken from the beginning and must be replaced by one with true choice for the consumer, and that embraces competition. Most importantly, situations like this, where taxpayer money is thrown away on programs that never had a chance to begin with, should never occur. I will continue fighting to help stop this collapse, and enact real, patient-centered, reforms that are sustainable and fiscally responsible.