Dive Brief:
- Republican lawmakers pointed fingers at the Obama administration Thursday during a hearing held to discuss the failure of half the health insurance co-ops created under the ACA, suggesting HHS and CMS got in their way and the system was "set up for failure from day one,” in the words of Rep. Chris Collins (R-NY).
- Democrats and co-op administrators, meanwhile, held the GOP accountable for what was the final nail in the coffin for some: Making the "risk corridor" program budget neutral, which reduced payments to just 12.6% of what was expected to cushion plans against higher than expected claims costs.
- Much of the focus surrounded the more-than-$1 billion funds the co-ops received in federal loans that might not be paid back.
Dive Insight:
The debate over the co-ops and the fate of the federal loans they received has heightened as a result of the spike in closures during recent weeks--as well as the growing momentum toward the next presidential race, in which the ACA is a major talking point.
Among the grievances of House Republicans was concern over the administration having provided additional funding to some of the co-ops that were struggling, and then failed anyway.
Among the concerns named by co-op officials were the requirements by the Centers for Medicare and Medicaid Services have posed barriers to success and their risk formula puts co-ops at a disadvantage. In addition, Dr. Peter Beilenson of Maryland’s Evergreen Health co-op argued at the hearing loan agreements need to be changed to allow co-ops to raise private capital, as previously discussed with Healthcare Dive.