Ohio ObamaCare co-op shutting down due to finances

A nonprofit health insurer in Ohio set up under ObamaCare is going out of business, regulators announced Thursday. It is the latest in a string of failures for “co-op” health plans. 

{mosads}The Ohio Department of Insurance announced that the co-op, known as InHealth Mutual, will be shut down, forcing its nearly 22,000 enrollees to find other plans within the next 60 days. 

“Our examination of the company’s financials made it clear that the company’s losses would prevent it from paying future claims should its operations continue,” Lt. Gov. Mary Taylor, who is also the Ohio director of insurance, said in a statement. 

The closure represents a significant disruption for the enrollees. The Obama administration and state regulators had worked to shut down any financially shaky co-ops before 2016 enrollment began on Nov. 1, in an attempt to avoid such failure in the middle of the coverage year. 

But that is now happening in Ohio. The Department of Insurance said ObamaCare enrollees in the co-op plan should log onto the health law’s marketplace in the next 60 days to select a new health insurance plan. 

“Thanks to the failure of Obamacare’s co-op health plans about 22,000 Ohioans will be forced to seek new coverage,” Rep. Pat Tiberi (R-Ohio), the chairman of the Ways and Means health subcommittee, said in a statement. “It is unacceptable. My constituents deserve certainty, not plans that crumble and implode under their own weight.”

He said the co-op’s failure is evidence of the need to repeal ObamaCare, and highlighted the healthcare task force put together by Speaker Paul Ryan (R-Wis.) that is coming up with the outline of a replacement plan. 

“We will work with InHealth and the state to provide consumers with the information they need to stay covered,” said Aaron Albright, a spokesman for the federal Centers for Medicare and Medicaid Services. “While we expect the number of issuers to fluctuate from year-to-year, consumer choice remains strong and new consumers in Ohio can still select from one of the state’s 16 other issuers on the Marketplace.”

He added that before ObamaCare, many Ohioans did not have insurance at all because of they had a pre-existing condition or because they could not afford it.

ObamaCare set up the nonprofit co-op health insurers as a way to increase competition in the insurance market. 

Many of the co-ops have gone out of business. Just 10 of the original 23 will now remain.

The Obama administration has said that like any start-up, it is natural that some co-ops would fail. 

Congressional Democrats have also pointed out that Congress cut the funding for the co-op program by more than half from the original $6 billion.

Republicans have questioned how much of the $2.4 billion in government loans to the co-ops will actually be repaid, given that many of them have failed.

— Updated at 6:37 p.m.