The short answer is: Not Too Well
Kaiser Health News reports this morning that of the original 23 health insurance co-ops (officially consumer operated and oriented plans) created to handle the influx of health-care starved enrollees, only 11 remain in business today and 4 of those will likely close leaving 7 co-ops still in operation for the coming year.
Why is this happening? There was a lot of bad claim experience just waiting to happen amongst the original group of enrollees. That only stood to reason given that the majority of those enrollees likely had no health insurance coverage at the time BUT had health problems causing them to flock to enroll, especially with the subsidized premium costs that were made available. They did what was expected; they enrolled and proceeded to get the health care they needed but couldn’t afford prior to ObamaCare. All the ObamaCare proponents applauded and lauded this wonderful new way to provide health care coverage.
Shouldn’t someone have been able to predict this utilization curve? Yes, and they did and thus made the promise that Obamacare would help these new co-ops offset the expected bad claims ratio they knew was out there just waiting for a place to happen. So far, so good.
The people operating these co-ops were, for the most part, knowledgeable about the health insurance business and they knew they would hit this ‘pent-up demand’ wall. But, not to worry. ObamaCare promised to reimburse the co-ops for what everyone expected would be some heavy payouts early-on but those reimbursements, when made, were insufficient to cover the costs, and now there is a decided lack of necessary funding.
There is a phenomenon in the health insurance business referred to as the ‘death spiral’and it is immutable. Once a health insurer essentially gets upside down, it will only get worse more quickly and that leads to ultimate plan failure.
A year ago, there were more than 20 co-ops still operating with about 1 million Americans covered. The 7 co-ops that are expected to remain in 2017 will cover about 350,000 people. No one seems to want to predict how many co-ops will survive this next enrollment season, but there is a very decided trendline that has been established for anyone who wishes to see it.
There are still those politicians who do not wish to see and acknowledge this trendline. Harry Reid and Nancy Pelosi come to mind (remember that dark-of-night bill passage?). Democrats, in general, wish that ObamaCare would just drop off everyone’s radar screen but that isn’t going to happen. There is a huge sucking sound which is made by our tax dollars being sucked into the ObamaCare abyss.
Republicans, largely the Speaker of the House, have been working to somehow modify the current Obamacare program so that a workable and sustainable program can be crafted from the ashes of this Phoenix. This needs to be a cornerstone of the Presidential campaign but whether or not it will remain to be seen. The Republicans need to press this issue for several reasons. First, there are citizens who rely upon Obamacare and have no other alternative. Second, this can be salvaged to one degree or another but there will need to be saner minds making those decisions than made the earlier decisions. Third, the Democrats are going to have to buckle their chinstraps and admit they screwed up big time with the first iteration.
ObamaCare needs to be made a cornerstone issue in the coming presidential campaign, and it needs to be communicated in plain language with numbers supporting the argument. Can the Republicans simply declare ObamaCare dead and not have a workable alternative ready to roll? No; that would mean certain failure at the polls all across America.
Donald Trump is going to need to pick a solid VP running mate and that probably will have to be a successful sitting Governor. Gov. Pence (Indiana) would be my choice without hesitation; he walks the walk and talks the talk. Donald Trump is going to need the Speaker of the House firmly onboard and Trump needs to bring himself under control if that is going to occur. Donald Trump needs politically smart and highly knowledgeable people on his team going forward. (1:23PM – News leaks indicate that Pence will be the VP pick announced tomorrow!)
Donald Trump can beat Hillary Clinton but not if he continues with his current style. We need to see Trump the Statesman emerge from the Republican Convention, desperately. He can win the seat in the Oval Office if he can become statesmanlike and stay statesmanlike. He needs a Pence to help him with his statesmanship and he needs to practice that from the convention forward.
If we don’t see Trump the Statesman, we almost certainly will see Hillary the President instead.