“The insolvent Iowa-based health insurance cooperative, CoOportunity Health, had to be taken over in December by Iowa insurance regulators. Iowa and Nebraska's Guarantee Associations - and state and federal taxpayers - are now on the hook for millions in claims the insurer could not pay.
CoOportunity Health wasn't a traditional health insurer. Rather, it was a taxpayer-funded, non-profit health insurance cooperative (co-op) established under the Affordable Care Act (ACA). The co-op program is plagued by numerous flaws. When co-ops were established, they had no customers and no historical actuarial data to assist in setting plan premiums. Startup funds and cash reserves were mostly borrowed from taxpayers. According to industry data only one of the 23 co-ops was profitable last year (a 24th co-op located in Vermont failed before it even got off the ground). While some of the remaining co-ops are losing money because of small size, others appear to have the strategy of losing money to gain market-share at taxpayers' expense.”