Obamacare Loses the Bet
Well, all but one of the Obamacare co-ops is currently running in the red, and about half of them have failed, because they lost too many bets: too many sick people signed up, too few people who weren't sick thought it was worth the money. And the Obamacare co-ops are dealing with it in exactly the way that has been traditional for bookies since at least the time of the Romans: they're welshing on the bet. New York's co-op, Health Republic, is shutting down at the end of the year. According to news reports, it currently owes New York hospitals more than $160 million, as well as owing doctors tens of millions. What's more:
The state has told Health Republic to stop paying some claims so it can conserve its assets and facilitate an orderly shutdown. Even though some providers are not getting paid, they are still contractually obligated to deliver services to patients, said Matt Anderson, a spokesman for the state Department of Financial Services. [Emphasis added.]
Swell deal, huh? If you're a doctor or a hospital, you don't know if you'll be paid, but you're still required by the terms of your contract to continue to see patients.
Now, to be fair, there were some contributing factors: Congress acted to force Obamacare co-ops to work on the funds actually allocated to the co-op, instead of allowing the administration to arbitrarily shift funds, and the state insurance regulators cut the premium increases requested by the co-ops, because -- well, because:
[S]tate regulators are often under political pressure to keep health insurance rate increases down. "Sometimes that can conflict with the goal of keeping companies financially strong," he said.
Which is, honestly, the story of the whole process. Insurance can be a legitimate business -- just as bookies can be legitimate when they set the odds to match reality. When a government tries to fudge the odds for political reasons, though, arithmetic takes over.
Complain about it as much as you like. Arithmetic won't listen. Arithmetic doesn't care.