Bleeding cash, the Louisiana Department of Insurance (LDI) announced Friday that Louisiana’s Obamacare health insurance co-op will be closing its doors by the end of 2015. It will be the second collapse of an Obamacare health care co-op this year and the third since the Obama administration rolled them out in 2012 as a competitor to commercial health insurance companies.
From the beginning, the Louisiana co-op was fraught with high-paid consultants who were not even from Louisiana, but Georgia. It also suffered from an apparent conflict of interest. George Cromer, its CEO, simultaneously served the Louisiana House of Representatives as chairman of that legislative body’s insurance committee.
Roughly 18 months into its existence, in September 2012, the Louisiana co-op received $66 million from the U.S. Centers for Medicare and Medicaid Services. By 2014, the National Association of Insurance Commissioners reported that the co-op had burned through half of its cash and suffered a net operating loss of $23 million. The co-op had only enrolled 17,000 paid subscribers out of a total state population of 4.6 million, according to state census data.
Obamacare has been a colossal disaster, but as I noted here yesterday, that was the whole point all along.