Pursuing Relief from Obamacare Co-Op Failures

Hundreds of thousands of Americans have lost their insurance due to the collapse of Obamacare’s Consumer Operated and Oriented Plans, or co-ops.

Using more than $2 billion in federal loans, 23 co-ops were created under Obamacare. Now, 16 have closed or are in the process of closing, with the remaining seven also struggling to remain solvent. The failed co-ops have taken $1.7 billion down with them.

Many Americans were forced to purchase insurance through the co-ops after losing their original plans due to Obamacare’s implementation, only to lose their insurance again due to co-op failures. These consumers have two options: quickly find other coverage and start over on their deductibles, or go without insurance and face a possible Obamacare tax penalty.

Americans were falsely told if they liked their health care plans, they could keep them. Those who made a good faith effort to comply with the law by purchasing insurance through an Obamacare co-op certainly should not face a hefty tax penalty due to the law’s own failures.

CoOportunity Health, the first co-op to close, left 120,000 Nebraskans and Iowans without coverage. When it collapsed, I heard from nearly 300 Nebraskans wondering what this change would mean for them, including concerns about penalties for lapses in coverage, having to cover deductibles twice in the same year, and seniors who did not want to deal with a new insurer for a short time before transitioning to Medicare.

Pam from Minatare shared her story with me about losing her insurance three times in a little over a year. First, the plan she had prior to Obamacare which covered her pre-existing condition was cancelled. In its place, she chose a plan from CoOportunity Health, which CoOportunity phased out after one year in an effort to remain solvent. Finally, after she selected a second CoOportunity plan, it was terminated when the co-op formally shuttered.

Melissa of Hartington wrote to me the day after Christmas in 2014 concerned her family’s CoOportunity plan was ending in early 2015 and they, including her child with medical needs, would find themselves paying a deductible twice or paying the individual mandate penalty for part of 2015, neither of which they could afford.

Thankfully, both of these situations were resolved, but not without a period of uncertainty and confusion. It is only fair we reduce the negative impacts for these families and ensure if any other co-ops close, Americans struggling to make an unexpected decision about health insurance mid-year do not have Obamacare’s individual mandate penalties to worry about as well.

This week, the Ways and Means Committee, on which I serve, passed my Co-Op Consumer Protection Act (H.R. 954) to exempt taxpayers from the individual mandate for the remaining months within the calendar year in which their co-op insurance plan was cancelled. The legislation applies retroactively to individuals who lost coverage after December 31, 2013, including those in Nebraska and Iowa impacted by CoOportunity Health’s collapse.

This bill is a simple solution to provide a measure of relief for consumers who followed the law and purchased health coverage, only to lose it through no fault of their own. I am pleased my Committee colleagues agree we must protect Americans impacted by Obamacare’s failures, and I will continue working to bring relief to Nebraskans harmed by this unworkable law.