President Obama's health care overhaul created 23 state-based insurance companies. So far, 12 of them have collapsed. Nine closed up shop this fall alone.
The reason? Well, these government-backed insurers — known as Consumer Operated and Oriented Plans — took their "nonprofit" status a bit too seriously and went bankrupt.
Michigan's co-op just announced it will close because it wasn't making enough money. As a result, more than 27,000 customers must now find insurance elsewhere. The announcement comes days after Arizona's co-op also shut down for the same reason.
The co-op scheme is proving to be one of the most misguided parts of the entire ObamaCare project. These insurers have lost billions of taxpayer dollars and left more than 740,000 people scrambling to find health coverage. And the situation will only grow worse.
ObamaCare established co-ops to provide exchange enrollees with low-cost insurance. The idea was that co-ops — unconcerned with maximizing profits — would offer exceptionally cheap plans and put competitive pressure on traditional insurers to lower their prices.
Things haven't exactly gone according to plan.
The problem is that these co-ops have been taking in less money in premiums than they're paying out in benefits. Over the first half of this year, ObamaCare's co-ops lost nearly $200 million — despite $2.4 billion in inexpensive loans from the federal government. Today, all but one of the 23 co-ops has lost money.
The mounting financial pressure has forced many to simply shut down.Read the rest of the story HERE.
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