Massachusetts Obamacare co-op struggling to stay afloat

posted at 12:01 pm on January 20, 2016 by Kristina Ribali

It’s like Groundhog’s day in the world of Obamacare co-ops.

I’ve reported several times here at HotAir and elsewhere about the struggles Obamacare CO-OPs-ops and state exchanges are facing in the real world, and the latest news out of Massachusetts seems to suggest that the trend of failing co-ops will continue.  Minuteman Health, the Massachusetts CO-OP (which stands for consumer operated and oriented plan) is a non-profit insurer that was supposed to provide lower-cost insurance in local markets, but according to the latest estimates, Minuteman is facing serious financial issues.

CO-OPs like Minuteman rely on having enough members to offset their costs, which as start-up health care organizations, can be quite substantial. Minuteman estimated that they need roughly 40,000 members “just to break even,” and expected to sign-up 30,000 in their first year. Instead, they signed up less than 2,000 their first year. Last year they reached 14,000 (only 35 percent of their breakeven enrollment) and they hope to have 23,000 by the end of 2016, which is likely overly optimistic given the markets they are operating in.

Minuteman was one of the 23 insurers launched two years ago as part of Obamacare, with $2.4 billion in seed money from taxpayers.  Minuteman got $156 million to get off the ground, a now they’re facing the same struggles that have led to more than half of the CO-OPs shutting down.

In yet another moment of candor, Massachusetts’ most notorious health advisor, Jonathan Gruber, said that “the CO-OP program was a risky venture from the outset, given how difficult it is for new companies to develop provider networks and compete with established insurance companies. But he said it was a risk worth taking,” because “it could pay off by giving consumers access to affordable insurance.”

Access to affordable insurance was the selling point for all of Obamacare, a plan that Gruber had a key role in creating, and passed because of, as he put it, “the stupidity of the American voter,” but it wasn’t voters who passed it and supported it.

As a board member of Massachusetts’ Health Connector, the state’s state-based exchange, Gruber oversaw a disastrous rollout and collapse of one of Obamacare’s most ballyhooed state marketplaces. What was supposed to be an easy way for people to sign up for affordable health insurance turned out to be a system that couldn’t perform as promised.

Now the Massachusetts CO-OP also looks doomed to fail. Between the collapse of the Connector, the resulting depressed enrollment, and millions of dollars in risk adjustment payments to companies like Blue Cross Blue Shield, Minuteman is struggling to stay afloat.

In order to keep prices down, Minuteman’s “network of doctors and hospitals excludes the state’s biggest providers, including Partners HealthCare and Beth Israel Deaconess Medical Center.” This may be one of the reasons for lower than expected enrollment.

The company’s former chief financial officer told the Boston Globe,

“In Massachusetts, the narrow network is an unpopular product,” Fallon said, “and the people who do pick it, it’s because they don’t anticipate any health care needs.”

In a previous interview, health care expert, Josh Archambault also told the Boston Globe, Minuteman has “a huge challenge to be long-term sustainable, and given the track record of the other co-ops around the country, there doesn’t appear to be others that have cracked the nut quite yet.”

Many of us warned that these co-ops couldn’t survive, regardless of how well intentioned they might have been. Progressives may try to manipulate the markets, and prop them up with billions in taxpayer dollars, but eventually they collapse.

If this trend of co-op failures continues it’ll only be a matter of time before I’m right back here reporting another failed Obamacare co-op – only the names and number of affected insured will change.

________________________________________

Kristina Ribali is the Senior Coalitions Director for the Foundation for Government Accountability.  Follow Kristina on Twitter and Facebook for the latest Obamacare news.

 


Related Posts:

Breaking on Hot Air

Blowback

Trackbacks/Pings

Trackback URL

Comments

Tax money from Bernie the commie will fix it all.

Just spend more, just tax more.

APACHEWHOKNOWS on January 20, 2016 at 12:06 PM

When premiums decline y’all are going to be pissed!
libfreeordie on May 7, 2014 at 10:18 AM

Schadenfreude on January 20, 2016 at 12:07 PM

Poor widdle co-ops… they were the fall guy from day one. They helped sell Zero-care to the twigs-and-gravel granola types who hated big insurance companies. “OOH, look we can get commune insurance!” Too bad they couldn’t get along without other people’s money.

Marcola on January 20, 2016 at 12:08 PM

KYNECT was just shut down.

Of course, it’s biggest co-ops had already collapsed so it was dead before Bevin killed it anyway.

ConstantineXI on January 20, 2016 at 12:09 PM

I had a Romneycare plan in mass-but no subsidy-the system worked perfectly-Obmacare was the disaster.

gerrym51 on January 20, 2016 at 12:15 PM

Many of us warned that these co-ops couldn’t survive, regardless of how well intentioned they might have been.

They were never “well-intentioned.”

mankai on January 20, 2016 at 12:16 PM

Well, at least the web site seems to be working. That’s something.

mankai on January 20, 2016 at 12:19 PM

KYNECT was just shut down.

Of course, it’s biggest co-ops had already collapsed so it was dead before Bevin killed it anyway.

ConstantineXI on January 20, 2016 at 12:09 PM

Bevin notified HHS that he was pulling the plug but he can’t actually turn off the switch until December. After the Kentucky Health Cooperative failed miserably last year there really isn’t much left on Kynect to shut down except the links to Medicaid.

Johnnyreb on January 20, 2016 at 12:20 PM

No one cares…hide it…cover it up…

albill on January 20, 2016 at 12:21 PM

Dreadloc to come in and try to defend O-No-Care in 3…2…1…

22044 on January 20, 2016 at 12:24 PM

Massive stock market sell off since Jan 1…..and why no comment from Obama or critique?

The boy genius supposedly solved all the problems in 2008…

albill on January 20, 2016 at 12:25 PM

Nothing to the 500 point fall of the DOW today.

Move along, hire more illegals all is good.

APACHEWHOKNOWS on January 20, 2016 at 12:26 PM

Sooooo, they are also claiming that “health spending” is going down – because of obumblescare of course.
Are they counting all of our tax money that’s being poured into these scam exchanges as part of that so-called “health spending”?

dentarthurdent on January 20, 2016 at 12:27 PM

Progressives may try to manipulate the markets, and prop them up with billions in taxpayer dollars, but eventually they collapse.

May try? They believe that direct government control is needed to ensure ‘fairness’, ‘equality’, and ‘justice’ in the marketplace. That markets are fundamentally broken.

What they still aren’t getting, despite direct firsthand experience, is that what breaks the market is the excessive government control.

Given the clusterfark that the ACA is – and in particular the financial side of it, none of this should be unexpected.

Athos on January 20, 2016 at 12:30 PM

Kill it.
Kill it with fire.

Better still: Kill it with the blunt, objective hand of economics.
Works every time, unless Holy Mother Government gets in its way.

orangemtl on January 20, 2016 at 12:32 PM

Sooooo, they are also claiming that “health spending” is going down – because of obumblescare of course.
Are they counting all of our tax money that’s being poured into these scam exchanges as part of that so-called “health spending”?

dentarthurdent on January 20, 2016 at 12:27 PM

Nah, I think that all the usual sycophants will do is try to convince everyone that premiums and costs are rising at a slower rate than they would have if the EpicClusterFarkNado didn’t exist. That all major eCommerce websites cost several billion and take 3-5 years to build out basic functionality and minimal security.

Athos on January 20, 2016 at 12:33 PM

Massive stock market sell off since Jan 1…..and why no comment from Obama or critique?

The boy genius supposedly solved all the problems in 2008…

albill on January 20, 2016 at 12:25 PM

All the leftist memes about high employment and great stock market performance go pffft…

22044 on January 20, 2016 at 12:33 PM

But he said it was a risk worth taking,”

It’s not a risk when you are using other peoples money…

PatriotRider on January 20, 2016 at 12:36 PM

ObamaCare, designed to fail since Day One.

GarandFan on January 20, 2016 at 12:36 PM

All the leftist memes about high employment and great stock market performance go pffft…

22044 on January 20, 2016 at 12:33 PM

Let’s just say that the price of oil does not drop below $20 if the economy is strong. But the obama administration refuses to recognize reality so they think everything is just dandy.

Oh and the latest leftist talking point about oil going below $20 a barrel because the dollar is so strong, no it isn’t, especially after the Fed pumped in over $3 Trillion dollars into the economy through QE infinity.

Johnnyreb on January 20, 2016 at 12:37 PM

A couple of years ago the NYT opined that Obamacare was on track to kill the middle-class.

Zee plan. It’s working.

WhirledPeas on January 20, 2016 at 12:39 PM

Kill it.
Kill it with fire.

Better still: Kill it with the blunt, objective hand of economics.
Works every time, unless Holy Mother Government gets in its way.

orangemtl on January 20, 2016 at 12:32 PM

Remember, the EpicClusterFark was never ever intended to be successful. It was nothing more than a means to a desired end.

It was designed to implode – leaving the ‘only viable solution’ single-payer.

It was never designed to ‘fix’ healthcare. It was designed to seize 1/6th of the national economy and place it under direct federal government control (CMS). It was designed to expand the scope, reach, and power of the federal government (mandates). It was designed to massively increase wealth redistribution (via subsidies).

The problem is that the EpicClusterFark is imploding faster than they thought it would.

Athos on January 20, 2016 at 12:41 PM

Hillarity, if only we had passed Hillarycare when Bill was pres.!

hip shot on January 20, 2016 at 12:49 PM

All the leftist memes about high employment and great stock market performance go pffft…

22044 on January 20, 2016 at 12:33 PM

Of course. Because it was all ‘pffft’ aka ‘smoke and mirrors’ from the get-go.

Nearly 7 years of near zero interest rates (rates held at the same level they were set at the worst of the 2008-9 recession), $4.5T-$5T pumped into the economy via QE (which should have generated 4-5% annual growth), rampant expansion of the regulatory boot on the throat of business, the use of government power to pick winners / losers based on ideology, the scam of unemployment numbers created by deciding not to count millions (but was reflected in the worse labor participation rates in nearly 40 years), the stock market bubble deliberately created, and what do we have? An Obama economy that is the longest, slowest, shallowest economic recovery since the Great Depression. The Atlanta Fed saying last quarter’s annualized GDP growth was 0.5% – and 7 years that struggle to average 2% annual growth?

Problem about ‘smoke and mirrors’ is that they can’t mask reality indefinitely.

Athos on January 20, 2016 at 12:49 PM

Of course. Because it was all ‘pffft’ aka ‘smoke and mirrors’ from the get-go.

Nearly 7 years of near zero interest rates (rates held at the same level they were set at the worst of the 2008-9 recession), $4.5T-$5T pumped into the economy via QE (which should have generated 4-5% annual growth), rampant expansion of the regulatory boot on the throat of business, the use of government power to pick winners / losers based on ideology, the scam of unemployment numbers created by deciding not to count millions (but was reflected in the worse labor participation rates in nearly 40 years), the stock market bubble deliberately created, and what do we have? An Obama economy that is the longest, slowest, shallowest economic recovery since the Great Depression. The Atlanta Fed saying last quarter’s annualized GDP growth was 0.5% – and 7 years that struggle to average 2% annual growth?

Problem about ‘smoke and mirrors’ is that they can’t mask reality indefinitely.

Athos on January 20, 2016 at 12:49 PM

Yep – all true!

22044 on January 20, 2016 at 12:51 PM

Finally, a post that I have personal experience with. Of course my satisfaction level is extremely high with the boston pols. :D

The people east of the CT river are FKing nuts. Most of the people west of the CT river, where I live, are great people, not unlike the people that I was raised around in east TX. And don’t get me started on the NYC weekenders.

I’m 64 and in perfect health. Kinehora. I’ve never had health insurance. However my wife needs care and we go to NYC to get it. They have driven every good doctor, save a few, out of western MA. And if people need care, they just game the system.

rik on January 20, 2016 at 12:54 PM

Problem about ‘smoke and mirrors’ is that they can’t mask reality indefinitely.

Athos on January 20, 2016 at 12:49 PM

More smoke!!!
And someone get out there quick and polish up those mirrors……

dentarthurdent on January 20, 2016 at 12:55 PM

There really aren’t any GOP candidates worth supporting anymore.

besser tot als rot on January 20, 2016 at 12:57 PM

Wrong thread. Heh. Oh well.

besser tot als rot on January 20, 2016 at 12:58 PM

A couple of years ago the NYT opined that Obamacare was on track to kill the middle-class.

Zee plan. It’s working.

WhirledPeas on January 20, 2016 at 12:39 PM

Clock. Broken.

rik on January 20, 2016 at 12:59 PM

When premiums decline y’all are going to be pissed!
libfreeordie on May 7, 2014 at 10:18 AM

Schadenfreude on January 20, 2016 at 12:07 PM

With your permission, friend Schad, it’s too good a post for just once.


When premiums decline y’all are going to be pissed!

libfreeordie on May 7, 2014 at 10:18 AM

Schadenfreude on January 20, 2016 at 12:07 PM

itsspideyman on January 20, 2016 at 1:06 PM

More smoke!!!

dentarthurdent on January 20, 2016 at 12:55 PM

Stop bogarting that joint.

Athos on January 20, 2016 at 1:09 PM

“Massive stock market sell off since Jan 1…..and why no comment from Obama or critique?

The boy genius supposedly solved all the problems in 2008…”

albill on January 20, 2016 at 12:25 PM

I prefer Robert Rubin’s answer to Clinton: The market goes up. The market goes down.

Steve_in_SoCal on January 20, 2016 at 1:09 PM

Good job as usual Kristina.

Everyone should take a look at these simple numbers:

they signed up less than 2,000 their first year. Last year they reached 14,000

Minuteman got $156 million to get off the ground</blockquote

You are reading that correctly. $156M to start up, plus whatever they collected in premiums. And they are about to tube. Simply amazing.

JusDreamin on January 20, 2016 at 1:12 PM

Kill it.
Kill it with fire.

Better still: Kill it with the blunt, objective hand of economics.
Works every time, unless Holy Mother Government gets in its way.

orangemtl on January 20, 2016 at 12:32 PM

And in the master’s chambers,
They gathered for the feast
They stab it with their steely knives,
But they just can’t kill the beast

Last thing I remember, I was
Running for the door
I had to find the passage back
To the place I was before
“Relax, ” said the night man,
“We are programmed to receive.
You can check-out any time you like,
But you can never leave! ”

ConstantineXI on January 20, 2016 at 1:15 PM

I’m 64 and in perfect health. Kinehora. I’ve never had health insurance. However my wife needs care and we go to NYC to get it. They have driven every good doctor, save a few, out of western MA. And if people need care, they just game the system.

Come to Arizona.
Low taxes. High temperatures. Good physicians if you’re a careful shopper, as with all things.
No snow, and few socialists outside of the central Metro (except in Sedona, the ‘crystal therapy and Reiki massage/aromatherapy, etc capital of the world).
And legal open carry.

orangemtl on January 20, 2016 at 1:27 PM

Jonathan Gruber, said that “the CO-OP program was a risky venture from the outset, given how difficult it is for new companies to develop provider networks and compete with established insurance companies. But he said it was a risk worth taking,” because “it could pay off by giving consumers access to affordable insurance.”

If you really believe that, then fund it yourself you pr*ck.

PackerBronco on January 20, 2016 at 1:32 PM

Maybe this is why someone keeps calling me and my husband and harassing us to sign up, even though we already have insurance. Anybody else getting these calls?

pannw on January 20, 2016 at 1:36 PM

ObamaCareless and its planned disintegration has always been a Trojan Horse for Single Payer.
.
wait for it ……

FlaMurph on January 20, 2016 at 1:54 PM

ITS PROFIT “SHARING” thats killing co-ops..they MUST GIVE THEIR PROFITS TO BLUE CROSS in MASS!!!?????? a little start up Must shear its PROFITS with the BIGGEST carrier in the STATE!!!!!

billofrights on January 20, 2016 at 2:18 PM

I bet that they lose money on every enrollee. This means that they’d probably be out of business even faster if they had actually signed up 40,000 people.

blink on January 20, 2016 at 1:25 PM

No, I hear you make that up in volume.

/s

The Schaef on January 20, 2016 at 2:37 PM

Come to Arizona.
Low taxes. High temperatures. Good physicians if you’re a careful shopper, as with all things.
No snow, and few socialists outside of the central Metro (except in Sedona, the ‘crystal therapy and Reiki massage/aromatherapy, etc capital of the world).
And legal open carry.

orangemtl on January 20, 2016 at 1:27 PM

Luv Zona. Spent a lot of time in Flagstaff in late 60’s. But I love snow.

rik on January 20, 2016 at 3:15 PM

Dreadloc to come in and try to defend O-No-Care in 3…2…1…

22044 on January 20, 2016 at 12:24 PM

LOL

You IRIE+, Mon! Walk Good…..

Del Dolemonte on January 20, 2016 at 3:19 PM

Math is racist.

NYCMike on January 20, 2016 at 7:11 PM