The first Obamacare-created insurer to go under could cost federal taxpayers up to $140 million, according to a new court filing.
CoOportunity Health, a nonprofit insurer created with $147 million in federal taxpayer loans as a result of the Affordable Care Act, was taken over by the state of Iowa in 2014 and declared insolvent in March of this year. Now the company’s ability to repay its loans may be looking grim, The Des Moines Register reports.
Daniel Watkins, a lawyer designated as the special deputy liquidator charged with helping dissolve CoOportunity Health, which formerly served Iowa’s and Nebraska’s Obamacare exchanges, filed a status report Friday in Iowa’s Polk County District Court, raising more questions about CoOportunity’s financial status.
While CoOportunity retains just $109 million in assets, it has over $282 million in liabilities, according to Watkins. Some of that money will be offset by a trio of risk mitigation policies in place at Obamacare exchanges — the reinsurance, risk adjustment and risk corridor mechanisms. CoOportunity is still negotiating the process with the federal Obamacare agency, the Centers for Medicare and Medicaid Services, but the pools are unlikely to meet the total funding the company requires.
After coming up with a $163 million operating loss during its first year as an nonprofit insurer, CoOportunity still owes federal taxpayers $147 million in start-up loans originally doled out by the Obama administration as part of the health-care law.
Watkins believes CoOportunity will bring in another $97 million for its services this year — but most of that will be owed to guaranty associations who have been covering medical bills for the company’s customers. Watkins doesn’t believe the new income will even begin to cover federal taxpayer loans.
Part of CoOportunity’s debts, however, include payments to insurance agents who sold the company’s policies but have yet to be paid for their services. Doctors, hospitals, clinics and other health-care providers have been paid, however, Watkins maintained.
Some customers faced financial difficulties as a result of the co-ops collapse as well. As CoOportunity’s customers switched coverage after the company was officially declared insolvent in March 2015, some had to begin paying their deductibles all over again after already making headway on the payments in January.
CoOportunity is the first Obamacare co-op to go under, but it will already be joined by a second this year. Louisiana Health Co-operative will shut down Dec. 31, 2015, according to Modern Healthcare. In all, at 19 of 23 nonprofits created by the law, losses exceeded the companies’ own projections for the first year of Obamacare’s operation. (RELATED: After Billions In Loans, Almost All Obamacare Co-Ops Were In The Red After Obamacare’s First Year)
Six co-ops are in especially deep financial trouble due to low enrollment and other pressures — but those haven’t yet been identified by federal officials. (RELATED: Obama Administration Refuses To Identify Troubled Healthcare Co-Ops)
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