Oregon fail: Another ObamaCare co-op collapses

Oregon has long set itself on the leading edge of ObamaCare failure. Their state exchange portal suffered catastrophic failure on launch, and after several months finally gave up entirely. That epic example of government incompetence cost US taxpayers more than $300 million.

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At least their co-op lasted longer than those in most other states. In a classic Friday night news dump, the state intervened to shut down its last remaining ObamaCare co-op after the government realized that it had badly misrepresented how much federal funding it would receive:

The Oregon Department of Consumer and Business Services, which regulates insurance, is taking action to shutter the carrier after the Centers for Medicare and Medicaid Services announced last week the CO-OP owes about $900,000 to the federal risk adjustment program, which pays health insurers that take on a disproportionate number of sick enrollees under the Affordable Care Act. The CO-OP expected to receive about $5 million from the program.

“The issue was the company badly misestimated the amount it would receive from the program,” DCBS Director Patrick Allen said.

That’s curious in and of itself. Supposedly, the co-ops exist to specifically address that contingent of sick enrollees. That report suggests that the co-op had a healthier than average risk pool in the ObamaCare system; otherwise, it would be a net recipient in the risk-adjustment program, not a net contributor. Even with that, the government-backed co-op still couldn’t make the ObamaCare model work — not even with the 32% increase in premiums it had requested and received for 2017. The Bend Bulletin reports that the co-op lost $18.4 million in 2015, and it looks like things got worse this year.

Like most of the other co-op failures, the failure of Health CO-OP doesn’t just impact next year’s enrollments. It throws people out of their insurance at the end of this month, requiring them to enroll in a new plan by August 1 in order to maintain coverage. That affects more than 20,000 people in Oregon, and if they live in the central part of the state, they now only have two options — Health Net and Pacific Source, both of whom raised their rates for 2017 by 9% and 15% respectively. And Health Net doesn’t actually offer plans through the ObamaCare exchange anyway.

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Allen says that’s all the choice Central Oregon needs anyway:

Allen said he realizes the CO-OP’s departure leaves many areas of the state with a serious lack of carrier choices. He said his agency will work to identify steps it can take to encourage carriers to re-enter certain counties. One possibility could be the extension of a state program that provided financial support to insurers but ended this year, he said.

In any case, Allen said two carriers is “certainly” enough going into 2017.

“There are something like 500 counties across the country that have just one carrier,” he said. “However, it’s something that we’re concerned about. Vigorous competition has been a hallmark of the Oregon marketplace.”

A vigorous competition of … one?

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