CoOportunity Health is a health cooperative initiated by the federal funding offered in the Affordable Care Act and was licensed for business in 2013. It was one of two dozen state-based co-ops created with the goal of adding competition into the marketplace in order to drive down costs.
Tuesday, the Iowa Insurance Division announced that due to financial concerns they had with CoOpportunity Health the Insurance Commissioner Nick Gerhart submitted a petition for an order of rehabilitation to Polk County District Court which was granted to allow the state to take over the company As a result one of two health insurance providers on the state’s marketplace on healthcare.gov is no longer accepting applications.
The Iowa Insurance Division’s concerns arose due to insufficient capitalization, the company’s inability to obtain additional capitalization from the Centers for Medicare and Medicaid Services, the unavailability of federal payments of the risk mitigation programs until the second half of 2015, and extremely high health care utilization.
The co-op which has 120,000 members in Iowa and Nebraska could soon go under, despite receiving $143 million from the federal government through the Affordable Care Act (otherwise known as Obamacare) the Des Moines Register reported.
Americans for Prosperity, an opponent of the Affordable Care Act, pointed out that CoOpportunity Health’s financial woes and the state’s actions demonstrate inherent flaws with the law.
“The President’s signature four year-old health care law still isn’t working despite spending in excess of the original budgets. Here in Iowa, we were promised more choice and lower premiums, yet now we learn that one of two co-ops responsible for providing affordable insurance can’t provide what the law promises.” Americans for Prosperity’s Iowa State Director Drew Klein said in a released statement. “America needs to return to the model that made our healthcare the greatest in the world by unlocking the potential of choice and competition among private companies risking their own capital instead of the taxpayers’. More money from Washington and new ‘experts’ won’t make centrally-planned health care work. The American spirit and individual freedom, will.”