A Nebraska Congressman says the collapse of a health cooperative created under the Affordable Care Act says a lot about the federal health insurance law.
CoOportunity Health seemed to have a bright future, insuring 120,000 residents of Iowa and Nebraska.
Yet, it amassed $150 million in liabilities and the Iowa Insurance Commissioner moved to liquidate it.
Congressman Adrian Smith has written the Secretary of Health and Human Services, asking why it collapsed.
“After all, CoOportunity Health was a creature, was a result of Obamacare. Their rates were too low and the numbers just didn’t hold up,” Smith tells Nebraska Radio Network.
Smith says he hasn’t received a reply from the Secretary of Health, yet.
CoOportunity Health was one of 23 nonprofit coops created under the ACA.
Their fate is uncertain.
“I’m very concerned moving forward and I hope that we can pursue policies that prevent the failure of an insurance company like this from happening again,” Smith says.
A similar cooperative insurance company in Tennessee is being watched closely by regulators. Others seem to be operating without the same fiscal problems that led to CoOportunity Health’s demise.
The insurance cooperative based in Iowa insured a little more than 40,000 Nebraskans. Former CoOportunity clients have been given an extended deadline, through April 29th, to find a new insurance company.
The Iowa Insurance Commissioner determined early in the year CoOportunity could not be saved. Under court supervision, liquidation was ordered on February 28th.
Nebraska State Insurance Director Bruce Ramge, acting in cooperation with the Iowa Insurance Commissioner, suspended CoOportunity Health in Nebraska after the Iowa Department of Insurance took it over. He ordered the co-op to not write additional policies in Nebraska.
CoOportunity Health formed as a nonprofit insurance cooperative under rules established by the Affordable Care Act. Not as much federal funding flowed to the cooperative as expected and its assets plummeted from $121.5 million to $17 million, according to court documents filed in Polk County, Iowa.
An Iowa judge appointed the Iowa Insurance Commissioner to assume management of the company. When he found it could not be restored, he requested the court allow its liquidation.
Medical claims being filed by CoOportunity clients are being paid by the state Guaranty Associations in Iowa and Nebraska.
AUDIO: Brent Martin reports [:50]