House Panel Investigates Failed Obamacare Co-ops
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House lawmakers are investigating why more than half of the insurance co-ops set up under Obamacare have failed.
One co-op in Vermont that received a $30 million taxpayer loan failed before it enrolled a single person. Rep. Tim Murphy, R-Pa., says that's because the Vermont insurance commissioner denied its license, citing a flawed application.
In total, the federal government handed out $2.4 billion in loans. Co-ops were designed to foster insurance competition, which is something even opponents of Obamacare applaud. But from the start, there were warning signs that the program is financially risky.
Rep. Murphy is the chairman of the House Oversight and Investigations Subcommittee of the House Energy and Commerce Committee, which is investigating what went wrong.
Murphy says as early as 2011, the Department of Health and Human Services predicted that 36 percent of the loans would go unpaid. One year later, he says, the Office of Management and Budget projected taxpayers would lose 43 percent of loans offered through the program.
The ranking Democrat on the subcommittee, Colorado Rep. Diana DeGette, says lawmakers should learn from these "bumps in the road" to improve the Affordable Care Act.
Among the reasons cited for the co-ops failure are low enrollments and premiums priced too low.
Officials don't expect taxpayers to recover the lost millions.
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