ACA Resilience To Be Tested

ForwardLAKE MACBRIDE— When the U.S. Senate passed the continuing resolution to fund the government (CRomnibus) on Dec. 13, who knew what was in it?

The folks at CoOportunity Health, an Iowa nonprofit insurance cooperative established by the Patient Protection and Affordable Care Act (ACA), should have. If they didn’t, they would find out three days later when the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS) notified them and the Iowa Insurance Commissioner that it would not provide solvency funding in the amount of $60 million.

CoOportunity had booked 2015 accounts receivable from the federal government in the amount of $125.6 million to meet projected claims. The shortfall in CRomnibus funding triggered a process wherein the Iowa insurance commissioner, Nick Gerhart, petitioned and was granted a court order appointing him as rehabilitator of the nonprofit.

The bottom line is that CoOportunity created health insurance policies under the ACA offering a very low premium—based upon the government subsidizing the risk. They attracted more customers than expected. A subsequent adverse claims experience resulted in deterioration of the companies financial reserves, and the funding cut in CRomnibus crippled the company. (Read analysis by the Lincoln Journal Star here).

Like it or not, Iowa is involved with fallout from the health insurance marketplace.

What does all of this mean to individuals and businesses who participate in the marketplace? The insurance commissioner was clear in a Christmas Eve press release:

The Iowa Insurance Division determined that CoOportunity Health is in a hazardous financial condition. On Dec. 23, 2014, Insurance Commissioner, Nick Gerhart, applied for and the Polk County District Court issued an order appointing the Commissioner as rehabilitator of CoOportunity Health. The company will continue in existence, but the Commissioner, as rehabilitator, is granted authority to manage the company. The Commissioner will assume management of the company; attempt to correct existing problems; continue operations; maintain policyholder accounting; and develop a plan of rehabilitation or petition the court for liquidation.

Most policyholders may find it in their best interests to find other coverage before the end of open enrollment, which ends Feb. 15, 2015.

Will people who signed up for CoOportunity health insurance on the marketplace be insured in 2015? According to the commissioner,

Yes, if you enrolled on or before Dec. 15, 2014, and you continue to make your premium payments.

No, if you signed up on Dec. 16, 2014 or later you will not have coverage with CoOportunity Health. You have until the end of open enrollment, which ends Feb. 15, 2015, to enroll in another plan.

In simpler language, Republicans can and will do anything they can to de-fund the ACA.

The other ACA-related issue that affects Iowans is the U.S. Supreme Court case King v. Burwell wherein the plaintiff seeks to strike down the health insurance subsidies provided by the federal government where states chose not to manage the health insurance marketplace. If the court strikes the subsidies, it is an open question what Iowans will do to secure coverage in the ACA marketplace, as federal subsidies are a basic idea of what the law does. Without them, participants could ill afford to pay the entire premium amounts.

Here’s what we know and knew before recent events:

It is better not to get sick, even if one has health insurance.

After taxes, health insurance is the biggest single cost in our household, representing significantly more than the mortgage payment was when we had one. We must face the music and pony up the health insurance money as a first priority.

It would have been cheaper for the federal government to put people my age into Medicare early, than to pay the subsidies to insurance companies.

For those of us fortunate enough to have had a health insurance plan throughout our adult years, the CoOportunity plan offered in the marketplace was inexpensive, but was new, and a bad deal. It did not have the network of providers we wanted. For example, instead of seeing a doctor three miles from my house, we would have had to travel to Cedar Rapids for treatment with CoOportunity. In the end, CoOportunity had inadequate capitalization and the idea of a member-owned cooperative was not sustainable, at least in Iowa.

The political will to take care of people’s health care needs, whether by the government or by other means, does not exist in Iowa and elsewhere. We are on our own when it comes to sustaining a life in a turbulent world.

There is a lot more that can be said about the ACA and the Republican opposition to it. Here’s hoping Democrats built enough resilience into the law.

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