- A federal audit has found that although overall insurance enrollments have increased, most federal insurance co-ops are still losing money.
- As a result, the co-ops may have difficulty paying back millions of dollars in federal loans.
- In an effort to fix the problem, the federal government is planning to increase supervision of the co-ops.
The co-ops were created by Congress in an effort to increase competition and keep costs down. According to Daniel Levinson, inspector general at the US Department of Health and Human Services, 22 of the 23 co-ops lost money last year; most had fewer enrollees than had been originally predicted.
Additionally, the co-ops have received a combined total of $2.4 billion in federal loans. “The low enrollments and net losses might limit the ability of some co-ops to repay start-up and solvency loans and to remain viable and sustainable,” Levinson said in a related report.
Government officials have said as part of their efforts to increase supervision, six co-ops have been placed on an informal "watch list." Although they declined to name them publicly, those on the watch list have been informed about performance problems and some have been ordered to take corrective action.