Unprecedented Demand? Not sure what that means? Just asking or actually signing up for the coverage?

Considering that close to half of the Obamacare Co-ops have failed costing tax payers about 1.1 billion.

Ten of the 23 health insurance co-ops created under Obamacare have gone out of business, and experts say more will follow.Utah’s Arches is the latest co-op to fail, along with others in Kentucky, New York, Nevada, Louisiana, Oregon, Colorado, Tennessee, South Carolina and a co-op that served both Iowa and Nebraska.
 

Last edited by Common Sense (12/15/2015 8:02 am)

I am well aware of the fact that conservative media outlets have been quick to pile on and label Obamacare as a failure when one of the state originated co-ops fails and claim the reason is the overall failure of the Patient Protection and Affordable Care Act (I know, it's easier, catchier, and more politically powerful to call it 'Obamacare' . . . Makes it easier to place blame). But, you have to delve a little deeper than the emotional headlines and sound bites to figure out what's going on here.

Let's take a look at the one Kentucky co-op that failed.

The failure of a non-profit insurance company, created and shored up with Obamacare money, has given Republicans an opportunity to put the reform law in a negative light. But here’s a fact you probably haven’t heard: Republicans were partly to blame for the failure of the Kentucky Health Cooperative, and may have been the proximate cause.

The co-op, one of 22 created under the law, was very much one of those insurers. It was expecting $77 million from the feds this year and got only $9.7 million. It had greatly underestimated the claims it would have to pay, and lost $50 million last year. In the first half of this year, its losses were only $4 million, but the die had been cast.

“The federal rescue helicopters never arrived because Republicans in Congress defeated the White House in budget negotiations and thus reduced spending on the co-op program to $2.4 billion from $10 billion,” The Wall Street Journal said in an editorial.

The U.S. Senate, under the leadership of Mitch McConnell, severely cut the earlier approved caps on healthcare spending. Mitch took some of that designated healthcare spending and shifted it to promotion and underwriting some fracking operations. This tells me Mr. McConnell is more interested in cutting breaks for his re-election benefactors that the general health of the Kentucky constituents he represents.

Many state regulated insurance co-ops that have established as offshoots of the large insurance companies are organized as not for profit business entities to take advantage of tax breaks while still qualifying for federal subsidies under ACA. Unfortunately, due to poor management that led to low enrollment in certain neophyte co-ops, and a higher than anticipated claims rates for the newly enrolled customers, coupled with the drastically reduced federal subsidies engineered by the federal senate and house, resulted in the demise of some state insurance co-ops.

Now, those enrolled in those failed co-ops have to go elsewhere to secure their healthcare insurance. Where do they go? Well, they go to another state co-op in the exchange or a federal insurance program if no state program exists. So, it kind of works out like that exalted  American economic mainstay called free enterprise, or let the market decide, or comparative advantage. The weak, poorly managed state insurance cooperatives will succumb to market pressures while the stronger well managed companies will survive and provide for their customers. Isn't that the way capitalism is supposed to work?

Wouldn't it be nice if elected officials would work together in a positive manner, for the overall good of the citizens, rather than constantly turning the screws on their opponents for their own political advantage?

Brady Bunch wrote:

Here is a good report detailing the issues of the failed co-ops:

http://www.commonwealthfund.org/publications/fund-reports/2015/dec/why-are-co-ops-failing

There is a link at the bottom of this article to the full report

 

Informative and comprehensive report.

If there is Unprecedented Demand?
Half of the exchanges should not be failing?

Common Sense wrote:

If there is Unprecedented Demand?
Half of the exchanges should not be failing?

 
Not necessarily.
You'd have to examine why they are failing to determine that.