The Co-ops Collapse: How GOP & HMOs Undercut Obamacare's Nonprofit Option, Leaving 500K Uninsured

By Amy Goodman
Democracy Now, Nov. 3, 2015

As the Obamacare open enrollment period begins, it’s the end for many healthcare co-ops, leaving hundreds of thousands of people scrambling to find coverage. The co-ops were founded to offer a cheaper alternative on insurance exchanges after Democrats stopped demanding a public option. But since going live three years ago, the co-ops have faced major cutbacks from the Republican-controlled Congress. Now the system is faltering, with at least eight health insurance co-ops shutting down. The co-op closures have left some 500,000 people without insurance—and a marketplace of fewer choices and higher prices. It’s the kind of scenario that advocates of a single-payer system warned about from the outset: With Obamacare relying on for-profit insurance companies to provide coverage, the market will find a way to squeeze out those who need it most. We are joined by three guests: physician, professor and single-payer advocate Dr. Steffie Woolhandler; Wendell Potter, a former insurance executive turned whistleblower; and Julia Hutchins, chief executive officer of Colorado HealthOP, a consumer-directed, nonprofit health cooperative in Colorado that was forced to shut down last month.

Excerpt from transcript:

We welcome you all to Democracy Now! Steffie Woolhandler, let’s begin with you. In New York, there are well over 200,000 people who are—have insurance under what’s called Health Republic, one of these healthcare co-ops. Suddenly, last Friday, to the shock of many—even people working within the system—they were told that this healthcare co-op will close by the end of the month. That’s November. That’s before you can even get coverage in this open enrollment period. The next time is January 1st. So they have to sign up twice—right now, to fill the gap to the end of December, and then, because of IT issues—they can’t just sign up now and get that insurance from now on in another company—they have to sign up now ’til the end of December, and sign up within the open enrollment period, like a day later, for getting insurance in January. Over 200,000 people are out of insurance.


AMY GOODMAN: Just in New York alone.

DR. STEFFIE WOOLHANDLER: Just in New York. And 10 of the 23 co-ops have closed, and several more are expected to close soon. These nonprofit co-ops, many of us felt they were never going to be viable. These tiny insurance co-ops was like the peewee football going against the NFL. They just didn’t have the size to make it in the marketplace.

But also, they weren’t cheaters. And the way the health insurance market works is good guys finish last, and cheaters win. The way you make a killing in the health insurance market is by signing up lots of healthy people, collecting as high premiums as possible and giving them as little care as possible—and, if they get sick, figuring out ways to force them out of the insurance. That’s the way the U.S. insurance market works. And these small nonprofit co-ops were not very good at playing the game. Many of them didn’t want to play that game.

So, we’re not surprised they went under. You know, the only way to insure a population, that has worked, is through some form of nonprofit national health insurance. That’s what every other developed nation uses. And then you have everybody in what we call the same risk pool—everyone in, nobody out.

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