Iowa Insurance Commissioner Nick Gerhart this month announced that Iowa-based Co-Opportunity Health will cost taxpayers at least another $80 million after being declared insolvent and taken over by the state.
The extra costs and liquidation of Co-Opportunity Health are a result of the company burning through $145.2 million in startup and emergency funding from federal taxpayers.
Devin Herrick, a senior fellow in health care policy at the National Center for Policy Analysis, said Co-Opportunity set its premiums too low so it could gain market share. “They played ‘chicken’ with taxpayer dollars and expected taxpayers to bail them out,” Herrick said.
Co-Opportunity Health was one of 23 federally funded startup nonprofit insurers created through the Affordable Care Act’s “Consumer Operated and Oriented Plans” Program to provide health care in Iowa and Nebraska. The state commission took over the cooperative after Gerhart decided the nonprofit’s claims would exceed its available cash.
The Iowa and Nebraska Life and Health Insurance Guaranty Associations will pay more than $80 million in claims to hospital, doctors and other medical providers who have not yet been paid. According to a release from Gerhart’s office, the two associations expect the federal government to reimburse them.