Many of the state cooperative health insurers, or "co-ops," set up under the provisions of the Affordable Care Act, aka Obamacare, have gotten into serious financial trouble quite quickly. Almost half have cracked up completely. Specifically, as noted at Forbes.com on Thursday morning, "[O]f the 24 Obamacare co-ops funded with federal tax dollars, one (Vermont’s) never got approval to sell coverage, a second (CoOportunity) has already been wound down, and nine more will terminate at the end of this year."
Perhaps the most expensive such blowup to date has occurred in New York. An unbylined Associated Press blurb about how New York's co-op will be forced to close its doors in just a month, seen after the jump, is a perfect example demonstrating why the general public may never learn about Obamacare co-ops' track record of miserable failure:
The likelihood that readers will stumble upon this AP story is very low. That's because, as seen in a search on "Health Republic New York" (not in quotes) at the wire service's main national site which returns nothing relevant, this ugly failure is not considered significant enough to be carried nationally.
Even those who do come across the AP story will have no idea that almost-dead Health Republic is a failed co-op, a creature entirely conceived under Obamacare, which the AP still routinely describes as President Barack Obama's "signature achievement."
But Health Republic is indeed a child of Obamacare, as a story at Politico noted on Friday. Even then, it took reporter Dan Goldberg three paragraphs to say so:
Health Republic Insurance of New York, the collapsing insurance company that is creating headaches for hundreds of thousands of New Yorkers, misled state and federal officials about its finances, and will not be able to remain in business through the end of the year as originally hoped.
The more than 200,000 customers insured with the co-op will lose their coverage Dec. 1, and must find a new plan by mid-November, according to the state and federal government. Health Republic insures about 20 percent of the state's individual market.
The company last month announced it would unwind its business after losing $130 million during its first 18 months. It is one of 10 co-ops to fail nationwide amid broader concern the business model for most of these companies, which were created by the Affordable Care Act and seeded with billions in federal funding, is unsustainable.
By the way, as the contrarian blog Zero Hedge noted, "misled state and federal officials about its finances" is a polite way of saying that "not only was this largest Co-op insolvent, it had also committed fraud" — at the very least, "fraud" in the sense of allegedly deliberate inadequate disclosure.
The problem with seeing a story covered at the Politico is that almost no one besides Washington insiders reads it, and the rest of the press all too often uses a story's appearance there as an excuse to ignore or downplay it, i.e., "The Politico covered it, so we don't have to."
The Wall Street Journal did a better job of assigning responsibility in a story it ran in late September when the co-op's failure was first announced:
Regulators will shut down Health Republic Insurance of New York, the largest of the nonprofit cooperatives created under the Affordable Care Act, in the latest sign of the financial pressures facing many insurers that participated in the law’s new marketplaces.
The insurer lost about $52.7 million in the first six months of this year, on top of a $77.5 million loss in 2014, according to regulatory filings. The move to wind down its operations was made jointly by officials from the federal Centers for Medicare & Medicaid Services; New York’s state insurance exchange, known as New York State of Health; and the New York State Department of Financial Services.
In a statement, Health Republic said it was “deeply disappointed” by the outcome, and pointed to “challenges placed on us by the structure of the CO-OP program.”
But few low-information voters will ever see the Journal's coverage, which is often placed behind a subscription wall.
So "If you like your health insurance plan, or your doctors, your other providers or your prescription drug regimen, you can keep them" is not only a presidential promise that was broken in the first year of general implementation after Obamacare's passage. It's a promise that over 200,000 New Yorker's now know continues to be broken. But somehow, that's not nationally important news.
All signs point to the establishment press continuing to scream that Obamacare is a success — even as it continues to fail.
Cross-posted at BizzyBlog.com.
