Fix Health Care Policy

Side Effects: Obamacare’s CO-OPs Put Taxpayer Dollars at Risk for No Good Reason

Yet another provision of Obamacare is expected to cost taxpayers more than they expected. The House Energy and Commerce Committee recently sent a letter to the Centers for Medicare and Medicaid Services (CMS) asking for details regarding the probable loss of $3.1 billion out of the $3.4 billion in Obamacare loans to its Consumer Operated and Oriented Plan (“CO-OP”). The estimate comes from the President’s Budget Appendix, and the committee is considering rescinding funds that haven’t already been obligated.

The Obamacare initiative gives CMS the authority to award $3.4 billion in loan subsidies to states to fund start-up costs and to help meet state solvency requirements for the health plans in the CO-OP initiative, The Committee’s letter explains that these loans are a bad investment for taxpayers: “[T]he amount of expected losses is estimated to be about $3.1 billion of the $3.4 billion appropriated (91 percent). These losses exceed the estimate HHS presented in its proposed rule.”

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Tags: bad investment, CMS, Co-Op, House Energy and Commerce Committee, President's budget appendix, taxpayers