U.S. Sen. Deb Fischer joined Iowa's senators in challenging a federal agency to help CoOportunity Health's stranded policyholders.
CoOportunity Health is one of the nation's 23 nonprofit Consumer Operated and Oriented Plans, or health insurers created by the Affordable Care Act to offer competition in their markets. It operated in Iowa and Nebraska and signed up more than 113,000 people in 2013 and 2014 until it was taken over by the Iowa Insurance Division on Christmas Eve, after its claims outspent its federal and premium support.
The circumstances of its failure have disrupted the lives of insured clients and the insurance agents and brokers who sold policies.
In a letter to Marilyn Tavenner, administrator of the federal Centers for Medicare and Medicaid Services, Fischer joined U.S. Sens. Chuck Grassley and Joni Ernst of Iowa in calling attention to CMS's failure to support it and its customers in its distress.
They pointed out that CoOportunity signed up more people than all but one of the co-ops created by the ACA, and in so doing, was under more financial pressure because of the volume of claims.
"Both CoOportunity and the Iowa Insurance Division informed CMS multiple times that without additional funding, the co-op could not continue to operate," the senators wrote. Nonetheless, CMS wouldn't add any more money. Congress, too, declined to appropriate more money.
People who signed up for insurance now face a dilemma, the senators wrote. They can stay on their CoOportunity plan as the company is being liquidated by the Iowa regulator and lose their federal tax credits. Or they can cancel their policy, find a new insurer and lose paid deductibles, co-pays and other out-of-pocket expenses for the Co-Oportunity plans, the senators wrote.
"For constituents who have already paid thousands of dollars toward their deductible, it is simply not feasible for them to get a new plan and then have to pay thousands of dollars again toward the new deductible," the senators wrote. "As the agency tasked with reviewing, approving rates and funding co-ops, CMS has a responsibility to solve this problem."
They asked the administrator to respond by defining the agency's obligations and also offer a plan to reimburse insured clients if they choose a new health insurer.
Separately, Sen. Ben Sasse added this comment: “This is a tragic example of the pain caused when federal regulators try to centrally plan life here in Nebraska. Given the fact that the vast majority of these ObamaCare co-ops have suffered first-year losses, HHS owes taxpayers and policyholders some answers.”
And the Nebraska Department of Insurance, late Tuesday, encouraged CoOportunity Health policyyholders who have not yet replaced their health insurance to act immediately. Sunday is the last day for open enrollment.
"Enrolling into a new plan may be inconvenient and, in some cases, a financial burden because some policyholders may have already had medical bills applied to their annual deductible," the department said.
But a special enrollment will last for 60 days after a liquidation order is signed, probably on Feb. 28, and when that expires, options for the purchase of individual health insurance may be limited. "It is questionable if any plans will be available at all because an insurer is not required to sell a policy to an individual outside of an open or special enrollment period," the department said.