President Obama may be able to veto attempts to repeal the Affordable Care Act, but the question is: can he forestall the eventual collapse of Obamacare due to financial mismanagement.
News reports this week have focused on the enormous economic pressure under which Obamacare is operating, including the announcement by regulators in New York that the state’s Health Republic health care co-op is under investigation.
Regulators there are looking into charges that Health Republic underreported its debt and that it misrepresented its financial viability. The co-op is the largest of 23 such insurance providers that were established across the U.S. under the ACA. Thirteen of these co-ops, including Health Republic, have gone under over the past two years.
“It is estimated that the Health Republic debacle will cost tax payers $355 million. The Obama administration provided an initial $265 million for the establishment of the co-op and then an additional $90 million in emergency funding,” according to Dan Weber, president of the Association of Mature American Citizens. “So much for reducing health insurance costs.”
The co-ops were among the Obamacare insurance companies being touted as examples of the success of the health care law in providing the kind of competition that would result in lower premiums across the board. Many of them exceeded their enrollment projections and then they failed because they got their customers by low-balling premiums, according to the Wall Street Journal.
“You don’t have to be a bankruptcy specialist on par with Donald Trump to understand that loading up on clients who are consuming health care but aren’t paying close to full freight is unsustainable,” the Journal explained in an article this week.
Weber pointed out that the country, as a whole, will feel the impact of the collapse of the co-ops because taxpayers are picking up the tab. But those dependent on Obamacare for health care coverage will be hit the hardest because the co-op failures are, at least in part, responsible for the spike in 2016 Obamacare premiums.
“Of course, those who purchased health care insurance from co-op providers, particularly the poorest among them, will be hurt the most, despite the claim that the ACA would make health insurance affordable. In the case of New York’s Health Republic, hundreds of thousands of policy holders were told on October 30th that they had just about a month to find a new provider at new rates.”