Insurance co-ops are in danger in several states
Troubling signs of potential financial collapse are being seen in 22 health insurance co-ops established through the Affordable Care Act. A co-op is a non-profit organization through which the same people that own the organization also receive insurance coverage from the organization itself. These organizations tend to be member-run, making them a source of competition for conventional insurance providers that operate a for-profit businesses.
Analysis shows that co-ops are experiencing accelerated net losses
According to analysis from the Daily Caller News Foundation Investigative Group, all but one of these insurance co-ops are currently in financial stress. These organizations are experiencing accelerated net losses, which could put the health insurance coverage of many people at risk. According to the analysis, these co-ops may experience a financial collapse similar to another co-op that failed earlier this year. That co-op suffered $163 million in losses in a single year of operation and its collapse left approximately 120,000 people without health insurance coverage.
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Co-ops see $614 million in losses in 2014, which could threaten the coverage of many people
The analysis shows that the co-ops collectively experienced losses of $614 million in 2014 alone. By the end of this year, these organizations may see their losses grow to a point that is no longer sustainable. If this happens, consumers that have coverage through co-ops will have to find policies elsewhere, such as through insurance exchanges that have been established in every state. This coverage may be more expensive, however, and some may not be able to afford the policies available through exchanges.
States may have to take steps to ensure that people can keep their health insurance if co-ops fail
Co-ops were first established as a way to introduce non-profit competition into the health insurance sector. The co-ops have struggled to compete with other insurance organizations, however, experiencing significant losses over the period of their operation. Some states may have to take action if their insurance co-ops happen to collapse in order to ensure that consumers are able to keep their health insurance coverage.