Kentucky nonprofit health insurer to shut down

The Hill ^ | 10 Oct 2015 | Peter Sullivan

[EXCH54FE]

Kentucky’s nonprofit health insurer set up under ObamaCare is shutting down because of financial problems, the latest in a string of closures for the nonprofit plans around the country.

Kentucky Health Cooperative, a nonprofit insurer known as a co-op, explained that it could not stay financially afloat after learning of a low payment from an ObamaCare program called “risk corridors.” That program was intended to protect insurers from heavy losses in the early years of the health law by taking money from better-performing insurers and giving it to worse-performing ones.

However, the Obama administration announced on Oct. 1 that the program would pay out far less than requested, because the payments coming in were not enough to match what insurers requested to be paid. Therefore, insurers only will receive 12.6 percent of the $2.87 billion they requested.

“It is with sadness that we announce this decision," the insurer’s CEO, Glenn Jennings, said in a statement. "This very difficult choice was made after much deliberation. If there were a way to avoid it and simultaneously do right by the members, providers and all others that we serve, we would do so.”

The Department of Health and Human Services says that it recognizes that the low payments to insurers could have raised financial concerns for some insurers, and that as start-ups, not all co-ops would succeed.

The Obama administration said when making the risk corridor announcement earlier this month that the low payments could cause “isolated solvency and liquidity challenges” for a small number of insurers.

[EXCH54FE]

Twenty-one of 23 co-ops nationwide were losing money as of Dec. 31, the HHS inspector general report found in July. Furthermore, enrollment was falling below projections for 13 of the 23 plans.

[FlingWingFlyer]

It would appear that the liberal myth about “free” healthcare is just that. A myth. It isn’t a “right” either. Liberals are FOS.

[tcrlaf]

The curse known as “MATH” strikes again.

[PrairieLady2]

It’s ironic that the greatest bulk of bankruptcies were due to medical expenses. Now, even the insurance companies can’t keep up either. Obama care is NOT the answer, obviously.

[upchuck]

One more step towards single-payer, the ultimate goal.

[FourPeas]

All part of The Plan to get to single payer.

[FourPeas]

The curse known as “MATH” strikes again.

Needs to be repeated.

[blueunicorn6]

No. No.

It’s like finding out that Mickey Mouse isn’t real.

[Bratch]

[Bratch]

[Senator_Blutarski]

Twenty-one of 23 co-ops nationwide were losing money as of Dec. 31, the HHS inspector general report found in July.

I see they are using the time honored "US Postal Service" business model.

[smokingfrog]

non-profit = no-workie

[God luvs America]

wasn’t this part of the kentucky exchange which is held up as the gold standard by liberals??

[Republican Wildcat]

“Nonprofit” can work just fine...but it still has to have a sustainable model. Obamacare is not that.

[Republican Wildcat]

Indeed it was.

[DannyTN]

"This wealth redistribution is trickier than I thought"

[DannyTN]

"This wealth redistribution is trickier than I thought"

[dfwgator]

[Chode]

all from the boy and his minions not smart enough to understand the business model of a lemonade stand.

[Wally_Kalbacken]

It is not true that the majority of bankruptcies are caused, or were caused by medical expenses. Before Elizabeth Warren became Senator Warren, she was a law professor at Harvard known for her work on the topic of bankruptcy. When Obamacare was being debated in Congress, she testified that the majority of bankruptcies were caused by medical expenses. That was not true then. It was arguably true that the majority of consumer bankruptcy cases had medical debt among the debts discharged. But causality is something entirely different. Many folks who blow up their credit cards recklessly also owe their physician or a clinic at the time they finally seek relief under 11 U.S.C. But that does not mean that medical debt drove the decision.

My thought is: who has standing to sue these non-profit executives? You know they backed the legislation, and you know they reaped large compensation all the while they were piloting a venture that was destined to end as it has here. There were no shareholders who were defrauded, but it would seem that you could make the case that by promoting (and managing) these ventures they hurt taxpayers but toasting more of our money.