More than half of ObamaCare nonprofit co-operatives owe a sizable sum of money to the federal government, but, sadly, collecting that debt is not likely.
The twelve co-operatives have failed to repay $1.2 billion in federal loans and owe more than $1 billion in additional liabilities, according to financials that were made public during a recent congressional hearing.
President Obama’s massive un-Affordable Care Act provided $2.4 billion in federal loans to create 23 non-profit cooperatives, but twelve of the 23 are closed and more than a billion dollars have gone down the drain.
When the Administration was probed about recouping payment on the loans, they said they were just beginning to figure that out. According to the chief operating officer and chief of staff at the Centers for Medicare and Medicaid, they plan to look at excess revenue and use tools available through their loan agreements and the law to take back federal tax dollars.
Just how much “excess revenue” is there though, if the reason these co-ops failed is because they weren’t tuning profits? Critics aren’t hopeful.
Fox News reports:
“We shouldn’t hold our breath on repayment,” Sen. Rob Portman, R-Ohio, chairman of the Senate Permanent Subcommittee on Investigations, said in his opening statement at the hearing.
“In some states, these losses will be absorbed by other insurance companies—which means, by the policyholders of other insurance companies who have to pay increased … premiums,” he said. “In other states, doctors, hospitals and individual patients stand to suffer large out-of-pocket losses due to the co-op failures—as our report details.”
The Administration kept its head stuck in the sand and ignored signs that these co-ops y were losing money and wasting taxpayer dollars on questionable expenses. For example, separately we learned that co-op executives at 10 failed cooperatives pulled down a whopping $8.2 million in salaries. Yet, the federal government continued to lend the failed cooperatives money despite claims that they had already lost more than $1.4 billion.
"Once the co-ops got going in 2014, things went south in a hurry—both in terms of financial losses and enrollment figures that wildly deviated from the co-ops’ own projections,” Senator Portman said. “Despite getting regular reports that the co-ops were hemorrhaging cash, HHS [the Department of Health and Human Services] took essentially no corrective action for over a year.”
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The failed cooperatives left hundreds of thousands of customers searching for a new insurance company. In some states, the loss was significant.
“HHS gave the New York co-op $90 million to prolong its financial life, rather than allow it to scale down, that co-op went on to lose another $544 million in 2015,” according to Portman’s statement, citing his staff’s report.
We funded these healthcare experiments that appeared to be doomed from the start. Now, we’re going looking at even higher outlays for them.
The Administration is trying to distance themselves from these failed co-ops, which will be hard, given that ObamaCare is a key part of President Obama's legacy.