ACA Government Co-Ops: Is This Experiment Working In Your State?

[Ann H]

Cookin' dem books?

Forbes Welcome

Love it. If every American listed their mortgage & credit card debt as an asset instead of a debt, they would be rich. On paper, at least.

Why on earth would they want co-ops to list the loans as an asset rather than a debt, in order to make them appear to be solvent?

 

[AllenChicago]

Love it. If every American listed their mortgage & credit card debt as an asset instead of a debt, they would be rich. On paper, at least.

Why on earth would they want co-ops to list the loans as an asset rather than a debt, in order to make them appear to be solvent?

Correct Ann, as usual. The start-up/solvency loans were structured to meet state solvency requirements.

Excerpt from the 2011 Regulation that set up Co-ops..
"Since Solvency Loans must be repaid to the Federal government within 15 years, the Advisory Board expressed a concern that they will be treated by States as debt rather than capital that satisfies State solvency and reserve requirements.

A loan is considered a liability and typically would not assist an organization in meeting solvency requirements, since the liability would have to be subtracted from the calculation of reserves in order to determine the net protection afforded to enrollees. In order to assist CO-OPs in meeting State solvency requirements, the loans will be structured so that premiums would go to pay claims and meet cash reserve requirements before repayment to CMS. The goal of this provision is to satisfy the reserve requirements of the individual insurance department in the States in which each CO-OP seeks licensure. The Advisory Board proposed that CO-OPs discuss the appropriate mechanisms with their insurance regulators for structuring the loans to meet reserve requirements and include a description of those mechanisms in their applications so that loan and repayment terms for that applicant conform to the State's requirements.

CMS proposes in § 156.520(a)(3) to structure Solvency Loans to each loan recipient in a manner that meets State reserve and solvency requirements so that the loan recipient can fund its required capital reserves. This ensures that they are recognized as contributing to State reserve and solvency requirements in the States in which the applicant intends to offer CO-OP qualified health plans.

From: Regulations.gov

 

[somarco]

How does a co-op that is insolvent, and has very few tangible assets, repay millions in loans? Once they shutter their doors there is no cash flow.

 

[TN_agent]

How does a co-op that is insolvent, and has very few tangible assets, repay millions in loans? Once they shutter their doors there is no cash flow.

It's called "We got ours, see ya suckers".

New math, they teach it in common core.

 

[HealthRisk]

Love it. If every American listed their mortgage & credit card debt as an asset instead of a debt, they would be rich. On paper, at least.

Why on earth would they want co-ops to list the loans as an asset rather than a debt, in order to make them appear to be solvent?

A number of them did the same accounting with the anticipated risk corridor payments as well. It was all about solvency but in actuality, it didn't provide an appropriate perspective on their funding levels.

 

[RayNY]

How does a co-op that is insolvent, and has very few tangible assets, repay millions in loans? Once they shutter their doors there is no cash flow.

If the half dozen that have flopped are any indication:

Company shuts down with just enough in reserves to cover member claims due. Creditors pick over the scraps and write the rest off (including the federal gov't).

A lot of people made a lot of money taking grants and running the company into the ground.

Some of these co-ops are laughably priced to steal market share, and were expecting to be made whole by the reinsurance programs. With an industry standard of estimating claims closer than 1% of reality, it's strange to see a company priced more than $1,000 off per member per year.

 

[blaube]

Community organizers should not be given the keys to the kingdom or put in charge of something as big as a country when they have never held a real job or had to make payroll.

That is a well said statement. I think I will use it somehow in the next email I send to my states leadership to encourage them to not expand Medicaid. I send them proof of states failing all the time, but they seem to not care. Sounds like our liberal/union ran gov in Alaska wants to learn the hard way. I really wish there was something I can tell them that would make them say, "Gee Wally, you are absolutely right." But there's not, liberals can't comprehend logic.

Thank you guys for this thread.

 

[Suburban Gal]

Can anyone here in the forum provide feedback as to your good, or bad experiences with the government cooperative in your state... Particulary, in the area of overall client satisfaction, and other relevant post-sale experience?

I've had Land of Lincoln Health (LLH) most of last year and all of this year and am disappointed in their products.

While their prices tend to be better than their competitor's prices, customer service rather sucks and it takes forever for them to process claims. Their online resource center for viewing claims, paying premiums, etc... is horrible. They made changes but it still needs work.

The AP reported a few months ago that IL's co-op co-op has struggled with low enrollment and financial losses. They're one of the 3 co-ops that is still up and running.

I plan on bailing LLH next month because I think it's just a matter of time before LLH goes under.

By the way, I'm really upset these co-ops are going under and taking taxpayer money with them.

 

[TN_agent]

I bet more will go under in the next two weeks now that more claims numbers are in. What a nightmare if they are on the exchange when Nov 1 comes, only to be pulled after people have chosen them.

Bad juju.

 

[Suburban Gal]

I read and article recently that talked about how Kentucky Health Cooperative is the latest insurance co-op under the ACA to fold because of financial instability. They'll officially close their doors on December 31st leaving 51,000 customers scrambling to find other healthcare coverage.

LLH sent me a postcard in the mail a few days ago discussing how open enrollment is approaching, how they'd like to retain me and how they're here to help renew my current LLH coverage or chose a new LLH plan. No thank you. I don't want to be one of those thousands of people in a bad spot should LLH eventually collapse and close its door for good.