October 17, 2015 08:02 AM UTC

Health Co-ops Designed to Fail?

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• by: Davie

(“The GOP landmine was armed and planted” – Promoted by Colorado Pols)

Reading today’s coverage in the Denver Post of the shutdown of Colorado’s Non-Profit Heath Co-op left me wondering “Why?”

Other than the parenthetical note that Sen. Gardner called for “an investigation” a few days earlier, no historical background was provided in the reporter’s article that would indicate the cause for this mysterious and apparently unforseen terrible outcome affecting 80,000 Coloradans.

One quick Google search and the information the Post appears unaware of was published by the Washington Post almost exactly two years ago, explaining what Republicans who controlled congress at the time had in mind for these co-ops.

Although the co-op plan originated in the Senate, resistance to the initial proposal quickly materialized on Capitol Hill, in part because of pressure from insurance industry lobbyists.

So Congress saddled its new creations with onerous restrictions that, experts say, doomed many co-ops to failure. Federal grants for the co-ops were converted to loans with tight repayment schedules; they were barred from using federal money for crucial marketing; and they were severely limited from selling insurance to large employers, which represent the most lucrative market.

So I believe Sen. Gardner’s “investigation” should be fairly quick:

But Karen Davis, a professor of health policy management at the Johns Hopkins Bloomberg School of Public Health, said the co-ops were not designed with the support they need to thrive. “One provision after another got stuck in there to limit their probability of success,’’ she said. “It’s a little ironic to say you are for competition in the free market and then you don’t make it easy for new entrants.’’

The changes still rankle (former Democratic Senator) Conrad, who left the Senate in January. “The long knives were out for this,’’ he said in an interview. “No money could be used for marketing? Really? That was clearly intended to be a poison pill.’’

Last year, as Washington approached what was being called the “fiscal cliff,” the White House again put co-op funding on the table. With hours remaining before the deadline, Senate Mi­nority Leader Mitch McConnell (R-Ky.) buttonholed Democrats in a Capitol hallway and said, “We want the co-op money,” according to a person familiar with the negotiations. The White House agreed.

Republicans had Obama’s White House over a barrel due to the threatened GOP-driven government shutdown, so they caved on this funding.

The GOP landmine was armed and planted, waiting to go off at the most opportune time.

Sadly, as reported in the Denver Post, this didn’t need to happen:

HealthOP said Friday that projections by an independent actuary showed the insurer would make money in 2016, be able to add to its reserves and pay down the federal loans.

So, a program intended to help individuals and small businesses with affordable health coverage is now doing exactly what the GOP designed it to do — fail — and even better, waste taxpayer’s money to prove that their dystopian view of government prevails.