CO-OP failures put spotlight on ACA’s many shortcomings


Since 2009, I’ve warned that the president’s healthcare law would eventually collapse. As a physician, I had serious concerns about the Affordable Care Act; unfortunately, Republican doctors in Congress were shut out of the debate by the Democrat majority at the time. Since then, we’ve seen premiums and out-of-pocket expenses skyrocket for American families.

The law that was supposed to help expand access to healthcare coverage has cost many families the health insurance plans they felt fit their needs, and many have been forced to change doctors because of network restrictions. Perhaps the most predictable failure of ObamaCare is the collapse of the Consumer-Oriented and Operated Plans, or CO-OPs, which have cost taxpayers more than $1 billion. The CO-OPs that haven’t closed their doors have joined other insurers to hike their premiums this year. 


The president’s healthcare law created CO-OPs as an alternative to many Democrats’ preferred option of a government-run insurance plan, referred to as the public option. A CO-OP is a nonprofit insurance program where organizations formed at a national, state or local level can receive assistance from the federal government to set up their own health insurance company. To receive federal assistance, the programs must be not-for-profit and cannot have anyone previously affiliated with another health insurer on their board.

This makes about as much sense to me as ramming a partisan, unpopular healthcare bill through Congress and kicking all the doctors out of the room, so I guess I shouldn’t be surprised.

The government took on this risky endeavor, ignoring warnings from the Department of Health and Human Services (HHS), and even some Democrats who supported the ACA, that the CO-OP program would fail. According to the House Energy and Commerce Committee, HHS predicted as early as 2011 that 36 percent of the loans would go unpaid. Similarly, in 2012, the Office of Management and Budget estimated taxpayers would lose 43 percent of the loans.

Twenty-three CO-OPs were created after the ACA was signed into law. To date, 12 — more than half — of these CO-OPs have failed, costing the taxpayers $1.23 billion and leaving more than a quarter of a million people looking for new insurance options — now with fewer choices.

This happened in my home state of Tennessee, when Community Health Alliance went belly-up, leaving roughly 27,000 Tennesseans without coverage for 2016. Community Health Alliance offered artificially low premiums; after the overwhelmed CO-OP stopped selling new polices in January and the following summer asked for a double-digit premium increase for 2016, it ultimately decided it was unable to handle the volume of consumers, in the wake of months of uncertainty. Ironically, this came after approximately 16,000 Tennesseans were left searching for insurance because CoverTN, a program that helped small businesses and self-employed Tennesseans purchase insurance, was canceled in 2013 because the program did not meet the minimum coverage requirements set by the president’s healthcare law.

I’ve heard some make the argument that the lack of Medicaid expansion, not the failed CO-OP, has left Tennesseans with few insurance options, but Tennessee learned a lesson about expensive, failed Medicaid expansions through our experience with TennCare.

Tennessee has a balanced budget, and TennCare, the state’s Medicaid program, crippled the state budget. Nearly 300,000 people were cut from the program a decade ago to keep it financially viable, and TennCare is now one of the most restrictive heathcare plans in the U.S. It limits how many medications patients can receive, what brands they can purchase and what doctors they can see. TennCare’s payments to physicians are lower than the rates paid by Medicare and private insurers, so many providers have opted out of the program and no longer see TennCare patients.

Tennessee Gov. Bill Haslam (R) worked tirelessly to find a path to provide Tennesseans with better health coverage choices, but the Obama administration restricted his options. Further, many Tennesseans are rightfully concerned about the strings that could be attached to a Medicaid expansion. One of the most significant concerns of working with this administration is the lack of trust that it will follow through on any commitment it makes.

Simply put, as ObamaCare continues to crumble, there are no good options under the president’s healthcare law for states. I believe we’ll continue seeing the negative effects of ObamaCare, but I know we can do better. Importantly, the Republican majority in Congress showed repeal is possible by getting a bill repealing the worst parts of the ACA to the president’s desk, but repeal efforts will not succeed until we have a new president. Until then, I’ll keeping fight to repeal and replace ObamaCare while doing everything I can to protect the patients being harmed by this law.

Roe has represented Tennessee’s 1st Congressional District since 2009. He sits on the Education and the Workforce and the Veterans Affairs committees.