As discussed yesterday (this is part 3 of an update on PPACA- there is one more in this array.),  PPACA (Obamacare) originally considered a single-payer solution. For about a second.  Then, the goal was to develop non-profit insurers to compete against the existing health insurers, thereby providing (one would hope) lower cost alternatives for US citizens.  All in the name of arresting health care cost increases- and, preferably, to lower our health care expenditures.

But, as we’ve seen, the funding for the non-profit coops was slashed.  From $ 10 billion to $ 6 billion to $ 2.4 billion.  And the money was changed from grants, which would let the new competitors be fully capitalized and advertise their wares to US citizens, to loans that precluded the use of the initial funds for advertising. So, instead of each state having a COOP, only 23 were going to be developed.

But, there’s more to the program than just getting things started.

There’s the fact that PPACA did not want to penalize insurance companies for taking care of the sickest and the oldest.  This concept is what was termed “risk adjustment”.  Those programs that got the youngest and the healthiest would obviously have lower costs than those who were stuck with folks like me- old and sick.  So, there were to be funds provided to those insurance programs that had the old and the sick- to ensure that these insurers wouldn’t take a big financial hit.

The ‘risk adjustment’ funds were supposed to come from the federal government for the first few years.  But, Senator Marco Rubio [CORRECTION: Rubio took the credit, but he had nothing to do with this provison being developed and passed. It was stealthily introduced by Senator Jeff Sessions and Representatives Fred Upton and Jack Kingston] took the mantel; he decried the “bailout” of the insurance companies.  (I guess it is only ok to bail out the rich banks- not the people’s insurance.)  This basically killed the idea- since Congress codified the termination into law.

So, now the idea was the insurers with the youngest and healthiest would bail out those with the sickest and the oldest.  Except the change was made AFTER the 2014 enrollment had completed.  So, that any potential costs for these transfers were never considered when setting the annual rates- and would now be an unintended expense.

It gets better.  Who do you think would get the youngest and healthiest as new enrollees?  Of course, the coops.  Older folks who had insurance would tend to stick to names they knew- the established insurance firms.  Not so for those who never had health insurance. They chose the new entities, the coops, whose fees were set as the lowest in the mix.  (And you thought the millennials were just dumb little kids.  Nah.  They recognized that the coops were offering them the best deals.)  And, now, that meant that the coops- the insurance firms just instituted- with loans for the initial capital (since the grants were killed) were now going to have to transfer their meager funds to the established insurance companies.  Now, they had to cope with new costs for which they had no notice or data.  (In other words, just another way to put an impediment in the clean operation of PPACA.)

It should not surprise anyone that…”[t]he co-op program has been politically orphaned,” as opined by Julia Hutchins, the CEO of the Colorado HealthOP.

But, of course, there’s more…Stay tuned for the next installment tomorrow.

I know I didn’t make today’s post about Veteran’s Day.  Mostly beccause I have nothing to add, except we need to recall this memorial  that began on the 11th day of the 11th month at the 11th hour.  To all our Veterans- we owe you.  Which is why it galls me to see our elected leaders fail to provide you adequate services- leaving many of you homeless on the street, suffering from PTSD, or worse.  It’s time for this to change.  Not by rhetoric.  By actions.

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