Ten health insurers known as co-ops are shutting down. Co-ops were created by the Affordable Care Act to compete against established insurance companies on price thereby providing consumers with less expensive insurance coverage options. Closings announced so far comprise more than one-third of the co-ops established by Obamacare.
Over the last few years, their prices were some of the cheapest priced plans in several markets. While realizing their original promise, those low prices weighed on their bottom line and resulted in huge operating losses. It is estimated that the Federal Government will suffer a loss of $1 billion on federal loans made to co-ops.
500,000 customers will now need to scramble to find a new health insurance provider for next year. The inevitable result of this news is less competition and higher prices for consumers seeking health care coverage in 2016.
The Co-ops that have announced they are closing are:
Health Republic Insurance of New York
Health Republic Insurance (Oregon)
Nevada Health Co-op
Coopurtunity Health (Iowa)
Coopurtunity Health (Nebraska)
Louisiana Health Cooperative
Kentucky Health Cooperative
Consumers Choice Health Insurance Co. (South Carolina)
Community Health Alliance (Tennessee)