Members of the House Ways and Means committee wrote Andrew Slavitt, the acting administrator for the Centers for Medicare and Medicaid Services, Tuesday seeking answers for the lack of oversight and financial solvency of the failing Obamacare co-ops.
“Federal spending, consisting of both start-up and solvency loans, totals $2.4 billion to date,” the letter said. “As you are aware, earlier this year, CoOportunity Health, the CO-OP serving Nebraska and Iowa, went bankrupt and was liquidated by the state of Iowa after only one year of offering health coverage. In July, Louisiana Health Cooperative announced it would be closing.”
The lawmakers cited a report by the Office of the Inspector General that discovered flaws in the CMS’ oversight strategy.
According to the OIG, 21 out of 23 of the programs had sizable net losses, with more than half losing over $15 million and credit rating agency Standard and Poor’s found several of the co-ops had medical loss ratios exceeding 100 percent.
“We look forward to working with you to improve oversight, accountability, and transparency of the CO-OPs, and most importantly, to protect taxpayers who stand to lose when they fail,” the lawmakers wrote.
The Health Republic of New York, the country’s largest nonprofit insurance company, is the latest to face public scrutiny for its incompetencies.
State regulators ordered the co-op, which was ranked the 2014’s worst insurance provider, to stop writing new policies.
The Affordable Care Act insurer received $265 million in federal start-up loans.
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